PROSPECTUS...PROSPECTUS POLARCUS LIMITED (a public quoted company organized under the laws of Cayman...

PROSPECTUS

POLARCUS LIMITED

(a public quoted company organized under the laws of Cayman Islands)

The information contained in this prospectus (the "Prospectus") relates to the listing on Oslo Børs of the 1,000,000,000 new shares (the "New Shares") issued by Polarcus Ltd ("Polarcus" or the "Company", and when taken together with its consolidated subsidiaries, the "Group" or the "Polarcus Group"), each with a par value of USD 0.01, in a private placement to certain investors successfully placed on 10 February 2017 (the "Private Placement"). The contemplated listing of the New Shares is expected to take place on or about 22 March 2017.

In addition, the Prospectus relates to the repair offering (the "Offering") by the Company of up to 122,000,000 new shares with a par value of USD 0.01 each (the "Offer Shares") at a subscription price of NOK 0.33 per Offer Share. In connection with the Offering, non-transferable subscription rights (the "Subscription Rights") will be granted to shareholders of the Company as of 9 February 2017, as registered in the Norwegian Central Securities Depositary (the "VPS") on 13 February 2017 (the "Record Date"), who did not participate in the Private Placement (the "Eligible Shareholders"). Each Eligible Shareholder will be granted 0.33 non-transferable Subscription Rights for each existing share registered as held by such Eligible Shareholder as of the Record Date. The number of Subscription Rights granted to each Eligible Shareholder will be rounded down to the nearest whole Subscription Right. Each Subscription Right gives the right to subscribe for, and be allocated, one Offer Share in the Offering. Over-subscription and subscription without Subscription Rights will be permitted; however there can be no assurance that Offer Shares will be allocated for such subscriptions. The subscription period for the Offering will commence at 22 March 2017 and end at 5 April 2017 (the "Subscription Period"). The Company's shares (the "Shares") are listed on Oslo Børs under the ticker code "PLCS".

Subscription Rights that are not used to subscribe for Offer Shares before the expiry of the Subscription Period will have no value and will lapse without compensation to the holder.

The Subscription Rights and the Offer Shares have not been and will not be registered under the Securities Act or the securities laws of any state of the United States and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Offering is not being extended into the United States. Outside the United States, the Subscription Rights and Offer Shares are being offered to non-US persons in offshore transactions (each as defined in Regulation S) in reliance on Regulation S under the Securities Act. The Offer Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. See Section 16 "Selling and Transfer Restrictions". Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time.

Assuming due payment of the Offer Shares subscribed for and allocated in the Offering, delivery of the Offer Shares in the VPS is expected to take place on or about 10 April 2017.

Prospective investors should read this Prospectus in its entirety. Investing in the Shares involves a high degree of risk. See Section 2 "Risk factors".

Manager:

ABG Sundal Collier ASA

The date of this Prospectus is 21 March 2017

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IMPORTANT INFORMATION

This Prospectus has been prepared solely for use in connection with the contemplated listing of the New Shares and the Offering. Please see Section 17 "Definitions and glossary" for definitions of terms used in this Prospectus.

The Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 No. 75 (the "Norwegian Securities Trading Act") and related secondary legislation, including the Commission Regulation (EC) No. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in Prospectuses, as amended, and as implemented in Norway (the "Prospectus Directive"). This Prospectus has been prepared solely in the English language. The Financial Supervisory Authority of Norway (the "Norwegian FSA") has reviewed and approved this Prospectus in accordance with Sections 7-7 and 7-8 of the Norwegian Securities Trading Act on 21 March 2017. The Prospectus is valid for a twelve-month period following its approval. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information given in this Prospectus. The approval given by the Norwegian FSA only relates to the information included in accordance with pre-defined disclosure requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described or referred to in this Prospectus.

The information contained herein is current as of the date hereof and subject to change, completion and amendment without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, significant new factors, material mistakes or inaccuracies relating to the information included in this Prospectus, which are capable of affecting the assessment of the Shares between the time when this Prospectus is approved and the date of listing of the Offer Shares on Oslo Børs, will be included in a supplement to this Prospectus. Neither the publication nor distribution of this Prospectus shall under any circumstances create any implication that there has been no change in the Group's affairs or that the information herein is correct as of any date subsequent to the date of this Prospectus.

No person is authorised to give information or to make any representation concerning the Group or in connection with the the Offering or the listing of the New Shares and the Offer Shares other than as contained in this Prospectus. If any such information is given or made, it must not be relied upon as having been authorised by the Company, the Manager or by any of their affiliates, advisers or selling agents.

The distribution of this Prospectus and the offering or sale of the Offer Shares and the issue of the Subscription Rights are in certain jurisdictions restricted by law. Persons into whose possession this Prospectus may come are required by the Company and the Manager to inform themselves about and to observe such restrictions. No action has been taken by the Company or the Manager that would permit, otherwise than under the Offering, an offer of the Offer Shares, the issue of the Subscription Rights, or possession or distribution of this Prospectus or any other offering material or subscription form relating to the Offer Shares or the Subscription Rights in any jurisdiction where action for that purpose is required. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any New Shares or Offer Shares offered by or on behalf of the Company or any other person in any jurisdiction in which such offer or solicitation is not authorized, or it is unlawful for such person to make such an offer or solicitation.

Prospective investors should rely only on the information contained in this Prospectus. Prospective investors also acknowledge that: (i) they have not relied on any advisor of the Company or any person affiliated with such advisor in connection with any investigation of the accuracy of any information contained in this Prospectus or their investment decision; and (ii) they have relied only on the information contained in this Prospectus, and that no person has been authorized to give any information or to make any representation concerning the Company or its subsidiaries or the Offer Shares (other than as contained in this Prospectus) and, if given or made, any such other information or representation should not be relied upon as having been authorized by the Company or its advisors. The Company has not authorized any other person to provide prospective investors with different information. No reliance

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should be placed on any different or inconsistent information provided by any person. Prospective investors should assume that the information appearing in the Prospectus is accurate only as at the date on the front cover of the Prospectus, regardless of the time of delivery of the Prospectus or of any offer or sale of the Offer Shares. The business, financial condition, results of operations and prospects of the Company could have changed materially since that date. The Company expressly disclaims any duty to update this Prospectus except as required by applicable law. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances imply that there has been no change in the Company's affairs or that the information set forth in this Prospectus is correct as at any date subsequent to the date hereof. This Prospectus should be read in its entirety before making any subscription for the Offer Shares.

In the ordinary course of their respective businesses, the Manager and certain of its affiliates may have engaged, and may in the future engage, in investment and commercial banking transactions with the Company and its subsidiaries.

This Prospectus and the terms and conditions of the Offering as set out herein shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Offering or this Prospectus.

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THE SECURITIES OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY UNITED STATES FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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The distribution of this Prospectus, the offer and sale of the Offer Shares and the issue of Subscription Rights are in certain jurisdictions restricted by law. No action has been or will be taken to permit a public offering of the Offer Shares or the possession or distribution of this Prospectus (or any other offering or publicity materials or subscription form(s) relating to the Offer Shares) (i) in the United Kingdom, other than to (a) persons who have professional experience in matters relating to investments who fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (b) high net worth entities and other persons to whom it may otherwise lawfully be communicated falling within Article 49(2)(a) to (d) of the Order or (c) other persons to whom it may otherwise lawfully be communicated or (ii) in any other jurisdiction, where action for that purpose may be required.

Accordingly, neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Prospectus comes are required by the Company and the Manager to inform themselves about and to observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. For a further description of certain restrictions on the offering and sale of the Offer Shares, see Section 16 "Selling and Transfer Restrictions". Neither the Company, the Manager nor its advisors accept any legal responsibility for any violation by any person, whether or not a prospective investor, of any such restrictions.

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Contents

1. SUMMARY ......................................................................................................... 7

2. RISK FACTORS ................................................................................................. 22 2.1 Risk factors related to the industry in which Polarcus operates ............................................ 22 2.2 Risk factors related to the Company and the Group ............................................................ 23 2.3 Risks factors related to finance ........................................................................................ 27 2.4 Risk factors related to the Shares .................................................................................... 28

3. RESPONSIBILITY FOR THE PROSPECTUS ............................................................. 31

4. GENERAL INFORMATION .................................................................................... 32 4.1 Presentation of financial and other information .................................................................. 32 4.2 Rounding ...................................................................................................................... 32 4.3 Industry and market data ............................................................................................... 32 4.4 Forward-looking statements ............................................................................................ 33 4.5 Manager ....................................................................................................................... 34 4.6 No advice ..................................................................................................................... 34 4.7 Third party information ................................................................................................... 34 4.8 Enforcement of civil liability ............................................................................................ 34

5. PRIVATE PLACEMENT ........................................................................................ 36 5.1 The Private Placement and the New Shares ....................................................................... 36 5.2 Proceeds of the Private Placement and use thereof ............................................................ 36 5.3 Resolution to issue New Shares ....................................................................................... 36 5.4 Share capital following completion of the Private Placement ................................................ 36 5.5 Dilution ........................................................................................................................ 37 5.6 The New Shares ............................................................................................................ 37 5.7 VPS registration and delivery of the New Shares ................................................................ 37 5.8 Selling and transfer restrictions ....................................................................................... 37 5.9 Advisors ....................................................................................................................... 37 5.10 Expenses ...................................................................................................................... 37 5.11 Lock-up ........................................................................................................................ 37 5.12 Interest of natural and legal persons involved in the Private Placement ................................ 37 5.13 Jurisdiction ................................................................................................................... 38

6. THE OFFERING ................................................................................................. 39 6.1 The Offering .................................................................................................................. 39 6.2 Participation of major existing shareholders and members of the Company's

management, supervisory or administrative bodies in the Offering ....................................... 44 6.3 Delivery and listing of the Offer Shares ............................................................................. 44 6.4 Mandatory anti-money laundering procedures ................................................................... 44 6.5 Financial intermediaries .................................................................................................. 45 6.6 Selling Restrictions and restrictions on distribution of Subscription Rights ............................. 45 6.7 The Offer Shares ........................................................................................................... 46 6.8 Shares following the Offering .......................................................................................... 46 6.9 Dilution ........................................................................................................................ 46 6.10 Advisors ....................................................................................................................... 47 6.11 Net proceeds and expenses related to the Offering ............................................................ 47 6.12 Interests of natural and legal persons involved in the Offering ............................................. 47 6.13 Publication of information relating to the Offering .............................................................. 47 6.14 Jurisdiction and governing law ......................................................................................... 47

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6.15 Lock-up ........................................................................................................................ 47 6.16 Supplementary Prospectus .............................................................................................. 47

7. INDUSTRY AND MARKET .................................................................................... 49 7.1 Market overview ............................................................................................................ 49 7.2 Seismic fleet overview .................................................................................................... 51 7.3 Positioning of Polarcus in the market ................................................................................ 52

8. BUSINESS ....................................................................................................... 57 8.1 Incorporation, registered office and registration number ..................................................... 57 8.2 Group history ................................................................................................................ 57 8.3 Overview of business activities ........................................................................................ 59 8.4 Data acquisition methods ................................................................................................ 63 8.5 Vision and strategy ........................................................................................................ 66 8.6 Organization and business lines ....................................................................................... 67 8.7 The Polarcus fleet .......................................................................................................... 69 8.8 Material contracts .......................................................................................................... 74 8.9 Organizational structure ................................................................................................. 85 8.10 Legal and arbitration proceedings .................................................................................... 90

9. OPERATING AND FINANCIAL INFORMATION ......................................................... 91 9.1 Summary of significant accounting policies ....................................................................... 91 9.2 Consolidated historical financial information ...................................................................... 92 9.3 Summary of key financials .............................................................................................. 96 9.4 Segment information ...................................................................................................... 97 9.5 Operating and financial review ........................................................................................ 99 9.6 Significant changes in financial and trading position after 31 December 2016

and trend information .................................................................................................. 113 9.7 Investments ................................................................................................................ 113 9.8 Summary of financing .................................................................................................. 114 9.9 Capital resources and indebtedness ............................................................................... 123 9.10 Auditors...................................................................................................................... 125

10. BOARD OF DIRECTORS, MANAGEMENT AND EMPLOYEES ..................................... 127 10.1 Introduction ................................................................................................................ 127 10.2 Board of directors ........................................................................................................ 127 10.3 Management ............................................................................................................... 132 10.4 Employees .................................................................................................................. 135 10.5 Benefits upon termination ............................................................................................. 137 10.6 Pension Scheme .......................................................................................................... 137 10.7 Corporate governance .................................................................................................. 138 10.8 Conflicts of interests .................................................................................................... 139

11. RELATED PARTY TRANSACTIONS ...................................................................... 140 11.1 Related party transactions during the financial year 2013 ................................................. 140 11.2 Related party transactions during the financial year 2014 ................................................. 140 11.3 Related party transactions during the financial year 2015 ................................................. 140 11.4 Related party transaction during the financial year 2016 ................................................... 140

12. CORPORATE INFORMATION AND DESCRIPTION OF THE SHARE CAPITAL ............... 141 12.1 General corporate information ....................................................................................... 141 12.2 Shares and share capital............................................................................................... 141

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13. SECURITIES TRADING IN NORWAY ................................................................... 157 13.1 Introduction ................................................................................................................ 157 13.2 Trading and settlement ................................................................................................ 157 13.3 Information, control and surveillance ............................................................................. 157 13.4 The VPS and transfer of shares ...................................................................................... 158 13.5 Shareholder register – Norwegian law ............................................................................ 158 13.6 Foreign investment in Norwegian shares ......................................................................... 158 13.7 Disclosure obligations ................................................................................................... 158 13.8 Insider trading ............................................................................................................ 159 13.9 Mandatory offer requirements ....................................................................................... 159 13.10 Foreign exchange controls ............................................................................................ 160

14. TAXATION ..................................................................................................... 161 14.1 Introduction ................................................................................................................ 161 14.2 Responsibility for withholding taxes at source .................................................................. 163

15. ADDITIONAL INFORMATION ............................................................................. 164 15.1 Documents on display .................................................................................................. 164 15.2 Incorporation by reference ............................................................................................ 164

16. SELLING AND TRANSFER RESTRICTIONS ........................................................... 166 16.1 General ...................................................................................................................... 166 16.2 Transfer restrictions ..................................................................................................... 168

17. DEFINITIONS AND GLOSSARY .......................................................................... 171

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1. SUMMARY

Summaries are made up of disclosure requirements known as "Elements". These Elements are numbered in sections A– E (A.1 – E.7) below.

This summary contains all the Elements required to be included in a summary for these types of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the types of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the label of "not applicable".

Section A – Introduction and Warnings

A.1 Warning This summary should be read as an introduction to the Prospectus.

Any decision to invest in the New Shares or the Offer Shares should be based on consideration of the Prospectus as a whole by the investor.

Where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation in its Member State, have to bear the costs of translating the Prospectus before the legal proceedings are initiated.

Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or if it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 Resale or final placement of securities by financial intermediaries

Not applicable. This Prospectus will not be used in subsequent resales by financial intermediaries.

Section B - Issuer

B.1 Legal and commercial name

The legal name of the Company is Polarcus Limited and the Company's commercial name is Polarcus.

B.2 Domicile/Legal form/Legislation/Country of incorporation

The Company is an exempted company validly incorporated with limited liability in the Cayman Islands, is registered with the Cayman Islands Registrar of Companies with registration number 201867 and regulated by the Companies Law.

B.3 Current operations, principal activities and markets

Polarcus is one of the five global marine three dimensional (3D) towed streamer geophysical service providers. The other providers are WesternGeco (Schlumberger), CGG, PGS and Shearwater. The seismic data acquired by the Company's vessels is used by oil and gas companies to evaluate hydrocarbon structures and to increase chances of commercial success ahead of

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the exponentially more expensive drilling phase. The data is also used to determine size and structure of known reservoirs in order to maximize field recovery and ongoing production rates. Polarcus has two principal business activities currently: contract seismic services and multi-client projects.

B.4a Significant recent trends affecting the issuer and the industry in which it operates

Not applicable. There are no significant recent trends affecting the issuer and the industry in which it operates.

B.5 The Group The Company is the parent company of the Group.

B.6 Persons having an interest in the issuer's capital or voting rights

Shareholders owning 5% or more of the Shares have an interest in the Company's share capital, which is notifiable pursuant to the Norwegian Securities Trading Act.

The Company is not aware of any persons or entities, except for those set out below, who, directly or indirectly, have an interest of 5% or more of the Shares as of the date of this Prospectus. The following persons or entities have given notice of an interest of 5% or more of the Shares in the Company:

Carl-Gustav Zickerman (through his wholly owned company Zickerman Holding Ltd), has holdings corresponding to a total of 89,201,797 Shares, corresponding to 5.83% of the issued share capital.

Board member Carl-Peter Zickerman (through his wholly owned company Zickerman Group Ltd), gave notice on 10 February 2017 that he held holdings corresponding to a total of 89,201,798 Shares, corresponding to 5.8% of the issued share capital.

Bybrook Capital LLP gave notice on 8 March 2017 that they, through Bybrook Capital Master Fund LP and Bybrook Capital Hazelton Master Fund LP, in aggregate, held holdings corresponding to a total of 220,416,926 Shares, corresponding to 14.4% of the issued share capital. Each of Bybrook Capital Master Fund LP and Bybrook Capital Hazelton Master Fund LP individually holds shares correspondning to 7.2% of the issued share capital after the Private Placement but before the Offering.

Pareto Asset Management AS gave notice on 13 March 2017 that funds managed by them, in aggregate, held holdings corresponding to a total of 84,344,300 Shares, corresponding to 5.51% of the issued share capital.

In addition the following nominee accounts hold more than 5% of the shares outstanding. These accounts may represent one or more individual investors which may or may not include the above

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mentioned entities and persons.

Skandinaviska Enskilda Banken nominee account has holdings corresponding to a total of 109,877,030 Shares, corresponding to 7.2% of the issued share capital.

J.P. Morgan Securities nominee account has holdings corresponding to a total of 227,502,572 Shares, corresponding to 14.8% of the issued share capital.

A separate J.P. Morgan Securities nominee account has holdings corresponding to a total of 100,000,000 Shares, corresponding to 6.5% of the issued share capital.

The Company is not aware that the Company is controlled or owned, directly or indirectly, by any Shareholder or related Shareholders.

B.7 Selected historical key financial information

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Consolidated Statement of income

Unaudited Unaudited Unaudited Audited Audited Audited

(In thousands of USD) Q4 2016

Q4 2015

31-Dec-16

31-Dec-15

31-Dec-14

31-Dec-13

Revenues Contract revenue 36,024 53,903 185,095 270,757 419,185 496,422 Multi-client revenue 11,224 12,070 56,569 92,819 44,535 33,748 Other income - 6,477 1,752 13,895 2,989 2,075 Total Revenues 47,248 72,450 243,416 377,471 466,709 532,245 Operating expenses Cost of sales (45,625) (58,119) (176,850) (204,287) (296,817) (302,962) General and administrative costs (4,246) (5,958) (19,358) (21,536) (19,765) (17,396) Provision for onerous contracts (26,356) (8,803) (46,356) (8,803) - Depreciation and amortization (11,255) (19,054) (48,672) (72,414) (79,089) (73,776) Multi-client amortization (21,000) (10,481) (56,807) (69,274) (37,228) (16,524) Impairments (24,774) (247,373) (26,658) (315,430) (35,111) (3,495)

Total Operating expenses (133,256) (349,788) (374,701) (691,744) (468,010) (414,153) Operating profit (86,008) (277,338) (131,285) (314,273) (1,301) 118,092 Share of profit/(loss) from joint ventures - (45) (1,220) (983) (280) (265) Finance costs (8,548) (13,770) (37,041) (61,136) (85,293) (80,100) Finance income 780 2,855 1,961 12,395 21,793 6,348 Changes in fair value of financial instruments (1,569) (1,401) (9,013) (13,310) - Gain on financial restructuring - - 177,787 - - -- Gain on acquisition of joint venture - - - - - - Profit before tax (95,346) (12,362) 154,802 (373,011) (78,392) 44,075

Income tax expense (1,650) 527 (3,243) (1,093) (243) (609) Net profit and total comprehensive income (96,996) (289,173) 20,274 (374,105) (78,635) 43,466

Earnings per share attributable to the equity holders during the period (In USD)

- Basic (0.183) (4.317) 0.046 (5.585) (0.145) 0.086

- Diluted (0.183) (4.317) 0.046 (5.585) (0.145) 0.086

Consolidated balance sheet:

Unaudited Audited Audited Audited

(In thousands of USD) 31-Dec-16 31-Dec-15 31-Dec-14 31-Dec-13

ASSETS

Non-current Assets

Property, plant and equipment 443,377 634,419 927,815 972,802

Multi-client project library 45,107 50,828 88,731 88,704

Investment in joint ventures - 1,220 2,203 2,483

Intangible assets - 255 31,969 36,739

Total Non-current Assets 488,484 686,721 1,050,718 1,100,728

Current Assets

Receivables from customers 47,595 58,755 73,056 103,425

Other current assets 21,337 34,185 41,658 29,996

Restricted cash 731 14,519 8,236 20,471

Cash and bank 13,731 53,976 65,488 60,045

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Total Current Assets 83,394 161,434 188,437 213,937

TOTAL ASSETS 571,878 848,156 1,239,156 1,314,665

EQUITY and LIABILITIES

Equity

Issued share capital 5,305 13,396 13,396 10,144

Share premium 586,401 532,222 532,222 501,843

Other reserves 29,865 32,556 33,149 38,533

Retained earnings/(loss) (442,764) (466,309) (93,302) (22,942)

Total Equity 178,807 111,865 485,465 527,578

Non-current Liabilities

Bond loans 34,582 - 226,743 202,801

Long-term finance lease - - 165,278 154,333

Other interest bearing debt 858 644 236,345 277,262

Long-term provisions 37,320 - - -

Other financial liabilities 10,511 22,324 13,310 -

Total Non-current Liabilities 83,271 22,968 641,676 634,397

Current Liabilities

Bond loans - 220,625 - 37,110

Finance lease - 166,018 8,394 5,897

Other interest bearing debt 249,649 256,911 44,358 41,656

Provisions 6,820 8,803 - -

Other accruals and payables 34,402 30,858 40,206 29,518

Accounts payable 18,929 30,109 19,056 38,509

Total Current Liabilities 309,880 713,323 112,015 152,690

TOTAL EQUITY and LIABILITIES 571,878 848,156 1,239,156 1,314,665

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Consolidated cash flow statement:



Q4 2015

31-Dec-16

31-Dec-15

31-Dec-14

31-Dec-13

Cash flows from operating activities

Profit/(loss) for the period (96,996) (289,173) 20,274 (374,105) (78,635) 43,466

Adjustment for:

Depreciation and amortization 11,255 19,054 48,672 72,414 85,374 77,271

Multi-Client amortization 21,000 10,481 56,807 69,274 37,228 16,524

Impairments 24,774 247,373 26,658 315,430 35,110 -

Changes in fair value of financial instruments

1,569 1,401 (13,315) 9,013 13,310 -

Employee share option expenses 141 150 581 505 2,890 2,689

Interest expense 8,825 13,172 32,659 55,055 62,229 76,080

Interest income (17) (41) (93) (799) (779) (204)

Gain on financial restructuring - - (177,787)

Effect of currency (gain)/loss (3,136) (1,099) (620) (4,785) (6,662) (5,306)

Gain on buyback of convertible bonds

- (1,204) - (1,204) (4,096) -

Net movement in provisions 26,356 8,803 30,553

Share of (profit)/loss from joint ventures

- 45 1,220 983 280 265

Working capital adjustments:

Decrease/(Increase) in current assets

21,794 18,211 19,727 22,284 25,597 6,575

Increase/(Decrease) in trade payables and accruals

1,468 1,432 2,745 3,428 (7,736) (26,092)

Net cash flows from operating activities

(2,582) 28,605 48,082 167,494 157,826 191,268

Cash flows from investing activities

Payments for property, plant and equipment

(965) (1,049) (16,387) (15,125) (52,727) (50,368)

Proceeds from sale of assets held for sale

- - - - - 128,003

Proceeds from the disposal of multi-client projects

- 6,714 - 25,197 - -

Payments for multi-client project library

(12,580) (11,616) (44,649) (96,969) (46,895) (47,927)

Payments to acquire intangible assets

- (12,326) (7) (12,439) (13,631) (14,130)

Net cash flows used in investing activities

(13,545) (18,276) (61,042) (99,336) (113,252) 15,578

Cash flows from financing activities

Net receipt from bank loans - - 7,900

Proceeds from the issue of ordinary shares

- - - - 33,631 16

Net proceeds from the issue of senior bonds

- - - - 56,102 93,083

Repayment of bond loans - (777) - (777) (58,734) (115,653)

Receipt from sale lease-back fund - - - - 20,000 -

Repayment of lease liabilities - (1,450) - (7,653) (6,559) (17,009)

Repayment of other long-term debt

(2,303) (1,437) (14,386) (15,144) (30,287) (75,329)

Interest paid (4,250) (7,550) (24,413) (41,632) (51,411) (58,777)

Financial restructuring fees paid - - (6,231) - - -

Other finance costs paid (397) (162) (959) (6,372) (1,023) (7,348)

Decrease/(Increase) in restricted cash

30 12,117 13,788 (6,282) 12,235 (12,365)

Security deposit related to currency swaps

(1,630) (3,480) 4,280 (510) (6,890) -

Interest received 17 41 93 799 779 204

Net cash flows from financing activities

(8,534) (2,697) (28,156) (77,571) (32,156) (193,178)

Effect of foreign currency revaluation on cash

1,168 (59) 872 (2,098) (6,975) 2,550

Net increase in cash and cash equivalents

(23,493) 7,573 (40,245) (11,512) 5,443 16,217

Cash and cash equivalents at the beginning of the period

37,224 46,403 53,976 65,488 60,045 43,828

Cash and cash equivalents at the end of the period

13,731 53,976 13,731 53,976 65,488 60,045

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Consolidated statement of changes in equity:

For the year ended 31 December 2016

Number of

Shares

Issued Share capital

Share Premium

Other Reserves

Retained Earnings/

(Loss) Total Equity

(In thousands of USD except for number of shares)

Balance as of 1 January 2016 66,981,368 13,396 532,222 32,556 (466,309) 111,865

Total comprehensive income/(loss) for the period

- - - 20,274 20,274

Employee stock options

- - 581 - 581

Other movements*

- - (3,272) 3,272 -

Issue of share capital

Class B shares issued to $95m bondholders

February 2016 at USD 0.0013 per share 265,384,592 345 26,044 - - 26,389

Class B shares issued to 350m NOK bondholders




Merger of share classes (on 13-April-2016)

Repurchase of Class B shares at USD 0.0013 per share (463,491,579) (603) - - - (603)

New ordinary shares issued at USD 0.20 per share 463,491,579 92,698 (92,096) - - 603

Reduction in nominal value

15 August 2016, from USD 0.20 to USD 0.01 per share

(100,790) 100,790 - - -

Balance as at 31 December 2016 530,472,947 5,305 586,401 29,865 (442,764) 178,807

*Other movements represent the fair value of employee stock options unexercised and expired during the period.

For the year ended 31 December 2015 - Audited

Number of

Shares Issued Share

capital Share

Premium Other

Reserves

Retained Earnings/(

Loss) Total Equity



Total comprehensive income/(loss) for the period - - - (374,105) (374,105)

Employee stock options - - 505 - 505

Other movements (1,098) 1,098 -

Consolidation of share capital

On 22 November 2015 (at 10:1 from USD 0.02 to USD 0.20 per share) (602,832,311) - - - - -


*Other movements represent the fair value of employee stock options unexercised and expired and the equity component of convertible bonds repurchased and cancelled.

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Number of

Shares


Share Premium

Other Reserves

Retained Earnings/(

Loss) Total Equity




Employee share options - - 2,890 - 2,890

Other movements* - - (8,275) 8,275 -


October 2014 at NOK 1.40 (USD 0.21) per share 162,592,500 3,252 31,639 - - 34,891

Transaction costs on issue of shares - (1,260) - - (1,260)




Number of

Shares Issued Share

capital Share

Premium Other

Reserves

Retained Earnings/(

Loss) Total Equity



Total comprehensive income for the year - - - 43,466 43,466


Other movements* - - (5,024) 5,024 -


20 March 2013 at NOK 3.58 (USD 0.62) per share 25,000 1 16 - - 17

Balance as of 31 December 2013 507,221,179 10,144 501,843 38,533 (22,942) 527,578

*Other movements represent the equity component of USD 35 million convertible bonds repaid upon maturity on 30 July 2013 (refer to Note 16 and Note 18.1).

Significant subsequent changes

Other than the Private Placement, the Offering, the contemplated bareboat charter of POLACUS AMANI and the 2017 Amendments, there has been no significant change in the Group's financial or trading position since 31 December 2016.

B.8 Selected key pro forma financial information

Not applicable. The Prospectus does not contain pro forma financial information.

B.9 Profit forecast or estimate

Not applicable. The Company has not made any profit forecasts or estimates.

B.10 Qualifications in the audit report on the historical financial information

In the Company's Annual Report from 2014, the Company's auditor, Ernst & Young AS, highlighted the Company's evaluation of its going concern assumption at that time, which was disclosed by the Company in the notes to the financial statements. The reason for the Company assessing its going concern assumption at that

15

time as having a material uncertainty was due to a tie-up of working capital, a decline in oil prices creating significant market uncertainty, and the Company needing to secure sufficient backlog in the future. The auditor emphasized the going concern assumption, liquidity risks and loan covenants, as well as the impairment assessment for the Company's vessels and seismic equipment. Based on these factors, as well as the market and financing situation, it was the auditor's opinion that there was an indication of uncertainty regarding the Company's ability to continue as a going concern. In the Company's most recent Annual Report from 2015 there are no qualifications in the audit report.

B.11 Working capital The Company has sufficient working capital for its present requirements for the next 12 months.

B.17 Credit ratings Not applicable.

Section C - Securities

C.1 Type and class of securities admitted to trading and identification number

The New Shares are registered in the VPS under ISIN KYG7153K1572. The New Shares have been listed and tradeable on Merkur Markets, with ticker code "PLCS-ME" for the period between issuance of the New Shares and the approval of this Prospectus

With effect from the listing thereof, the New Shares will be registered in the VPS under ISIN KYG7153K1085, which is the same ISIN under which the Company's listed shares are registered.

The Company's register of shareholders with the VPS is administrated by DNB Bank ASA, Verdipapirservice, Dronning Eufemias gate 30, 0191 Oslo.

C.2 Currency The New Shares and the Offer Shares are issued in NOK.

C.3 Number of shares and par value

The Company's authorized share capital is USD 19,567,097.7956 divided into 1,878,341,579 Ordinary Shares of a nominal or par value of USD 0.01 each and 602,832,312 Class B shares of a nominal or par value of USD 0.0013 each.

The Company's issued share capital is USD 15,304,729.47 divided into 1,530,472,947 Shares each with a nominal or par value of USD 0.01, all fully paid and issued in accordance with Cayman Island law. There are no issued Class B shares.

C.4 Rights attached to the securities

The New Shares are Ordinary Shares of the Company with no special rights attached to them.

C.5 Restrictions on free transferability

The New Shares are freely transferable, subject to any local regulatory transfer restrictions.

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C.6 Admission to trading The New Shares have been listed and are tradeable on Merkur Markets, with ticker code "PLCS-ME" under a separate ISIN number being KYG7153K1572 for the period between issuance of the New Shares and the approval of this Prospectus.

The New Shares are expected to be listed on Oslo Børs. The listing thereof is expected to take place on or about 22 March 2017.

The Offer Shares are expected to be listed on Oslo Børs. The listing thereof is expected to take place on or about 10 April 2017.

C.7 Dividend policy Polarcus is committed to maximizing the shareholder value, by inter alia declaring dividends to the Shareholders from its profit. However, the Company is restricted from declaring dividends under its loan facility and bonds.

Polarcus has not issued any dividends in the Company's history.

Section D - Risks

D.1 Key information on the key risks that are specific to the issuer or its industry

Economic development and trends The demand for the Company's services will depend substantially on the level of activity and capital spending by oil and gas companies and specifically in relation to development and exploration expenditure.

Government regulation and political risk Changes in the legislative and fiscal framework governing the activities of oil and gas business could have a material impact on exploration and development activities or affect Polarcus' operations or financial results directly or indirectly.

Competition Polarcus operates in a highly competitive global market.

Fluctuating revenues from period to period The Company's future revenues may fluctuate significantly from quarter to quarter and from year to year as a result of various factors driven by both supply and demand influences.

Insurance coverage Although the Company has taken out insurance coverage that the Company considers customary in the industry, such insurance arrangements will not carry full coverage of all its operating risks.

Contractual and counter-party exposure The revenues of the Company will be dependent on contract awards at competitive terms. Furthermore, the revenues of the Company will depend on the financial position of its customers and the willingness and ability of these customers to honour their obligations towards

17

Polarcus in a timely manner.

Multi-client investments The Company has made considerable investments in acquiring and processing seismic data that the Company owns ("multi-client data"). The multi-client data is being licensed to third parties for non-exclusive use in oil and gas exploration, development and production activities. However, the Company does not know with certainty how much of the multi-client data it will be able to license or at what price.

Operating risks The Company's assets are concentrated in a single industry and the Group may be more vulnerable to particular economic, political, regulatory, environmental or other developments than a company with a more diversified portfolio of activities.

The seismic data acquisition operations are exposed to extreme weather and other potentially hazardous conditions. There is an inherent exposure to technical risks, which may lead to operational problems, and increased operational costs and/or loss of earnings, additional investments, penalty payments, and other such costs which may have a material effect on the earnings and financial position of the Company.

Technology may become obsolete The Company's technology could be rendered obsolete as new and enhanced products and services are introduced to the seismic market.

Tax Operating internationally, Polarcus will be subject to taxation in several jurisdictions around the world. With increasingly complex and ever changing tax regulations and interpretation of these, the taxation of the Company could increase in certain jurisdictions. The Company may also in the future be subject to review of past years tax returns and be subjected to additional taxes and penalties. These conditions may have a material effect on the Company's financial results.

If Polarcus is controlled by Norwegian taxpayers, the Norwegian CFC-regulation ("NOKUS"- rules) may, in certain conditions, result in the Company being taxed under Norwegian law as if it had been a Norwegian company. Pursuant to the Company's Articles of Association, the Company may refuse to accept shareholder positions leading to the CFC-regulations becoming applicable. Also, other amendments to applicable tax provisions may have negative impact on the return on the investment of Norwegian taxpayers.

Access to funding The Company may require additional capital in the future due to unforeseen liabilities or in order for it to take advantage of opportunities for acquisitions, joint ventures

18

or other business opportunities that may be identified by the Company.

Should the current working capital and cash flow from operations not be sufficient to meet the Company's financing needs, the Company may be forced to reduce or delay capital expenditures or research and development expenditures, and/or sell assets or businesses at unanticipated times and/or at unfavourable prices or other terms, and/or to seek additional equity capital or to restructure or refinance its debt.

Financial leverage and breach of covenants The financial leverage of the Company or any breach of covenants (or other circumstances which entail that loans fall due prior to the final maturity date) may have several adverse consequences, including the need to refinance, restructure or dispose of certain parts of the Company's businesses in order to fulfil the Company's financial obligations.

Defaults and insolvency of subsidiaries In the event of insolvency, liquidation or a similar event relating to one of the Company's subsidiaries, all creditors of such subsidiary would be entitled to payment in full out of the assets of such subsidiary before the Company, as a shareholder, would be entitled to any distributions. Such an event would likely cause a cross-default under all the Group's current financing instruments entitling the Group's secured creditors to enforce their security rights in priority to the Company, a shareholder.

Exchange rate fluctuations Currency exchange rate fluctuations and currency devaluations could have a material impact on the Company's results from time to time.

Uncertainty with respect to exercise of call option It is not certain that the Company will have sufficient liquidity to exercise the call options under CB Tranche B1, CB Tranche B2 and the Unsecured Bonds at the reduced call option prices.

Debt service and increased charter rates from 1 January 2019 As part of the 2016 Restructuring and consequent to the 2017 Amendments, the Company will not have to service the repayment instalments under certain financing arrangements until 2019, and not pay interest on certain bonds until 2019. The ability to make principal and interest payments when due, and to fund ongoing operations, including payment of increased charter rates, will depend on the Group's future performance and ability to generate cash and profit, which is subject to market conditions and general economic, financial and competitive factors beyond the Group's control.

19

D.3 Key information on the key risks that are specific to the securities

Volatility of share price There can be no assurance that an active market for the Company's Shares can be sustained. The Company's share price may experience substantial volatility. The market price of the Shares could fluctuate significantly.

Risks related to issuance of Shares or other securities It is possible that the Company may decide to offer additional Shares in the future in order to strengthen its capital base or for other reasons. Any additional offering of Shares may be made at a significant discount to the prevailing market price and could have a material adverse effect on the market price of the outstanding Shares.

Risks associated with dilution Due to regulatory requirements under foreign securities laws or other factors, foreign investors may not be able to participate in a new issuance of Shares or other securities and may face dilution as a result.

Any investor that is unable or unwilling to participate in the Company's future share issuances will have their percentage shareholding diluted.

Section E - Offer

E.1 The total net proceeds and an estimate of the total expenses

The gross proceeds to the Company from the Private Placement amounted to NOK 330 million. The costs and expenses of, and incidental to, the listing of the New Shares amounted to approximately USD 2.5 million. Based on this, the net proceeds to the Company amounted to approximately NOK 309 million.

The gross proceeds to the Company from the Offering will be approximately NOK 40.3 million assuming it is fully subscribed. The Company's total costs and expenses of, and incidental to, the Offering are estimated to amount to approximately NOK 1.2 million. Based on these assumptions the net proceeds to the Company will be NOK 38.1 million.

E.2a Reasons for the offering and use of proceeds

The cash received as proceeds from the Private Placement and the Offering will be used to pay the fees and expenses of the Private Placement and the Offering respectively and to strengthen the Company's liquidity position as well as for general corporate purposes.

E.3 Terms and conditions of the offering

The Offering comprises of an offering of up to 122,000,000 Offer Shares each with a nominal value of USD 0.01, at a Subscription price of NOK 0.33 per Offer Share, corresponding to gross proceeds of up to approximately NOK 40 million.

Eligible Shareholders of the Company as of the end of 9 February 2017, as registered in the VPS on the Record Date, who did not participate in the Private Placement, and who are not resident in a jurisdiction where such offering

20

would be unlawful, or for jurisdictions other than Norway, would require any filing, registration or similar action, will be granted non-transferable Subscription Rights giving a right to subscribe for, and be allocated, Offer Shares in the Offering. Each Eligible Shareholder will, subject to applicable securities laws, be granted 0.33 non-transferable Subscription Rights for each existing Share registered as held by such Eligible Shareholder as of the Record Date. The number of Subscription Rights granted to each Eligible Shareholder will be rounded down to the nearest whole Subscription Right.

The Subscription Rights will be registered in the VPS on ISIN KYG7153K1655 and will be distributed to each Eligible Shareholder's VPS account on or about 6 April 2017.

The Subscription Period for the Offering will commence at 22 March 2017 and end at 5 April 2017.

Allocation of the Offer Shares is expected to take place on or about 6 April 2017.

The allocation of Offer Shares to subscribers in the Offering shall be made pursuant to the following criteria:

a. Allocation will be made to subscribers on the basis of granted Subscription Rights which have been validly exercised during the Subscription Period.

b. If not all Subscription Rights are exercised, subscribers having exercised their Subscription Rights and who have over-subscribed will be allocated additional new Offer Shares on a pro rata basis based on the number of Subscription Rights exercised by each such subscriber. To the extent pro rata allocation is not possible, the allocation shall be determined by drawing of lots.

c. Any remaning Offer Shares not allocated pursuant to the criteria in items a. and b. will be allocated to subscribers not holding Subscription Rights. Allocation will be made pro rata based on the respective subscription amounts, provided, however, that such allocations may be rounded down.

The Board reserves the right to round off, reject or reduce any subscription for Offer Shares not covered by Subscription Rights on the on basis of criteria such as (but not limited to) current ownership in the Company relative to orders size, sector knowledge, perceived investor quality and investment horizon.

No fractional Offer Shares will be allocated. Allocation of fewer Offer Shares than subscribed for will not impact the subscribers' obligation to pay for the number of Offer Shares allocated.

Notifications of allocated Offer Shares in the Offering and the corresponding amount to be paid by each subscriber will be set out in a letter from the Manager, which will be mailed on or about 6 April 2017. The Company expects to

21

issue a stock exchange notification announcing the results of the Offering on or about the same date.

The Payment Date for the Offer Shares in the Offering is 7 April 2017.

Registration of the share capital increase pertaining to the Offer Shares issued in the Offering is expected on or about 10 April 2017. Delivery of the Offer Shares issued in the Offering is expected to take place by registration of the Offer Shares in the VPS on or about 10 April 2017.

The Offer Shares issued in the Offering will be listed on Oslo Børs as soon as the Offer Shares issued in the Offering have been registered in the VPS.

E.4 Material interests in the offering

The Manager or its affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager does not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Manager will receive a management fee in connection with the Private Placement and the Offering and, as such, have an interest in the Private Placement and the Offering.

Beyond the above-mentioned, the Company is not aware of any interest, including conflicting ones, of any natural or legal persons involved in the Private Placement or the Offering.

E.5 Selling shareholders and lock-up agreements

Not applicable. There are no selling shareholders in the Private Placement, nor are there any lock-up restrictions on the New Shares issued in the Private Placement or the Offering.

E.6 Dilution resulting from the Offering

Following completion of the Private Placement and the Offering, the aggregate dilution for the existing shareholders is approximately 67.9% (assuming full participation in the Offering).

E.7 Estimated expenses charged to investor

Not applicable. The Company will not charge any expenses to the investors.

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2. RISK FACTORS

Investments in the Company's New Shares involves inherent risks. Before making an investment decision with respect to the New Shares, investors should carefully consider the risk factors set forth below and all information contained in this Prospectus, including the Annual Financial Statements and related notes. The risks and uncertainties described in this Section 2 are the material known risks and uncertainties faced by the Group as of the date hereof that the Company believes are relevant to investments in the New Shares.

Investments in the New Shares are suitable only for investors who understand the risks associated with this type of investment and who can afford to lose all or part of their investment. The absence of negative past experience associated with a given risk factor does not mean that the risks and uncertainties described in that risk factor are not a genuine potential threat to investments in the New Shares. If any of the following risks were to materialise, individually or together with other circumstances, they could have a material and adverse effect on the Group and/or its business, financial condition, results of operations, cash flows and/or prospects, which could cause a decline in the value and trading price of the New Shares, resulting in the loss of all or part of investments in the New Shares.

The order in which the risks are presented does not reflect the likelihood of their occurrence or the magnitude of their potential impact on the Group's business, financial condition, results of operations, cash flows and/or prospects. The risks mentioned herein could materialise individually or cumulatively. The information in this Section 2 is as of the date of this Prospectus.

2.1 Risk factors related to the industry in which Polarcus operates

2.1.1 Economic development trends

The demand for the Company's services will depend substantially on the level of activity and capital spending by oil and gas companies and specifically in relation to development and exploration expenditure. The activities of the oil and gas companies tend to follow the prices of oil and gas which have fluctuated widely over recent years. A decrease in oil and gas prices may have a negative impact on the expenditure on exploration activities which may affect demand for the services of the Company. Financial projections for and valuation of Polarcus' assets are largely based on certain assumptions including those related to future conditions for the markets in which Polarcus will sell its services. Actual changes in market conditions may affect the accuracy of the assumptions and future prospects of Polarcus. Historically, the markets for oil and gas have been volatile.

2.1.2 Multi-jurisdictional operations

Operations in international markets are subject to risks inherent in international business activities which might significantly affect the Company's financial performance and competitiveness, including, but not limited to;

general economic conditions in each relevant country,

changes in taxation and other fiscal regulations,

unexpected changes in regulatory requirements,

environmental protest activity,

compliance with a variety of foreign laws and regulations,

war, terrorist activities, piracy, political, civil or labour disturbances, economic sanctions, trade policies, embargos, border disputes, military activity,

renegotiation or cancellation of contracts by client,

23

restrictions in currency repatriation,

challenges in enforcing contractual rights including the right to payment, and

changes in laws that restrict operations or increase the cost.

2.1.3 Government regulation and political risk

Changes in the legislative and fiscal framework governing the activities of oil and gas business could have a material impact on exploration and development activities or affect the Company's operations or financial results directly. Changes in political regimes might constitute a material risk factor for Polarcus' operations in foreign countries, including contract and bareboat chartering arrangements for the Polarcus vessels. In a worst case scenario, political authorities will in certain circumstances be in a position to seize the vessels when these are operating within or flagged under a particular jurisdiction.

In certain countries there is an inherent risk of bribery, corruption and unethical work practices. The Company has developed clear policies and operating procedures to avoid these risks, and to the extent where reasonably possible, the Company will ensure that all external bodies that it is required to interact with, operate to the same high standards. Nevertheless, the Company's operations could be impacted through the actions of these external bodies. The Company's operations are subject to numerous international conventions as well as national, state and local law, and regulations in force in the jurisdictions in which the Company conducts, or will conduct, its business. These laws and regulations relate to, inter alia, the protection of the environment, natural resources, human health and safety, taxes, certification and visa regulations, licensing and permits for offshore blocks and other requirements. In particular, compliance with environmental regulations may require significant expenditures and breaches may result in fines and penalties, which could be material. Whereas the Company pays and has paid particular attention to safety, conduct and the environment in its execution of business, stricter regulation or changes in the application of existing regulations may impose increased costs for operating the business of the Company, or otherwise impact the Company's financial condition, operating results or future prospects. The Company also operates to strict international standards prohibiting unlawful commercial practices.

The Company cannot predict the extent to which its future cash flow and earnings might be affected by mandatory compliance with any such new legislation or regulations.

2.1.4 Competition

Polarcus operates in a highly competitive global market. The Company may face competition from other marine seismic companies as well as other ship owners that introduce capacity into the market place. This, as well as overcapacity in the seismic market, could adversely affect the operating results of the Company.

Polarcus' revenue and operating results can vary significantly from quarter-to-quarter and year-to-year driven by competitor fleet size and global fleet distribution relative to market demand. Polarcus' operating income is challenging to forecast due to changes in market demand driven directly by changes in oil and gas company expenditures.

2.1.5 Commodity prices

Any large fluctuations in oil price could materially impact the demand for seismic services.

2.2 Risk factors related to the Company and the Group

2.2.1 Service life and technical performance

The service life of a modern seismic vessel is generally considered to be approximately thirty years, but could depend on its efficiency, periodic vessel maintenance and demand for such

24

vessels. There can be no guarantee that the vessels or equipment deployed by Polarcus will have a long service life. The vessels may have particular unforeseen technical problems or deficiencies, new environmental requirements might be enforced or new technical solutions or vessels might be introduced to the industry.

The complex operations of the Company may lead to technical and operational difficulties that result in downtime for the vessel or inability of the vessel to complete a contract. Such risks may materially affect the operating results and reputation of the Company.

2.2.2 Fluctuating revenues from period to period

The Company's future revenues may fluctuate significantly from quarter to quarter and from year to year as a result of various factors including the following:

increases and decreases in industry-wide capacity to acquire seismic data;

fluctuating oil and gas prices, which may impact customer demand for the Company's services;

different levels of activity planned by the customers;

the timing of offshore lease sales and licensing rounds and the effect of such timing on the demand for seismic data and geophysical services;

the timing of award and commencement of significant contracts for geophysical data acquisition services;

weather and other seasonal factors;

seasonality and other variations in the licensing of geophysical data from the Company's multi-client data library; and

reduced vessel utilization due to longer than scheduled yard stays, transits and/or delays in obtaining necessary permits.

2.2.3 Access to personnel

The Company's development and business success are significantly dependent upon senior management and other key personnel. Attracting and retaining qualified field and office based personnel is of significant importance for the operation of the Company's business. The maritime and seismic industries are highly competitive for skilled personnel. There is no guarantee that the Company will be able to attract and retain the personnel required to continue its business and successfully execute the business strategy which might have negative effects on the Company's operating results and financial performance.

2.2.4 Insurance coverage

Although the Company has taken out insurance coverage that the Company considers customary in the industry, such insurance arrangements will not fully cover all its operating risks. Operation of the vessels represents a potential risk of loss of or damage to the vessels and equipment. In addition, the Group may not be able to maintain adequate insurance cover for its vessels and equipment in the future or do so at premiums that are considered reasonable. An accident involving any of the Group's assets could result in loss of earnings, fines or penalties, higher insurance costs and damage to the reputation of the Company. The Group may not have sufficient insurance cover for the entire range of risks resulting in particular losses not being covered. Any significant loss or liability not insured could have a material adverse effect on its business, financial condition and results of operations. In addition, the loss of or continuing unavailability of one or several of its vessels could have an adverse effect on the Group even if effective insurance cover should be available.

25

2.2.5 Contractual and counter-party exposure

The revenues of the Company are dependent on contract awards at competitive terms. Furthermore, the revenues of the Company will depend on the financial position of the customers and the willingness of these customers to honour their obligations towards Polarcus in a timely manner. There can be no guarantees that the financial position of the contract parties will be sufficient to adhere to the obligations under the contracts with the Company. The inability of one or more of the contractual parties to make payment under the contracts might have a significant adverse effect on the financial position of the Company.

Polarcus is and will in the future be party to various contracts related to its business, most importantly seismic survey contracts and bareboat chartering arrangements. Consequently, the Company is and will be exposed to counter party risks. Any potential default by such counterparties or their inability or lack of willingness to fulfil their commitments may have a material adverse impact on the Company's operating results and financial position. In a worst case scenario the counter party will under certain circumstances be in a position to seize the vessels for a period of time when these are operating within or flagged under a particular jurisdiction.

The Company has currently no new building projects or concrete plans for new projects, but may in the future enter into contracts related to construction of vessels. Any material delays related to the construction of vessels or other contracts of importance for the construction and equipment of a vessel may have a material adverse effect on the Company and its financial position. A potential default or delay by any counterparty, including the shipyard, could have an adverse effect on the Company and its financial position.

2.2.6 Multi-client investments

The Company has made considerable investments in acquiring and processing seismic data that the Company owns ("multi-client data"). The multi-client data is being licensed to third parties for non-exclusive use in oil and gas exploration, development and production activities. However, the Company does not know with certainty how much of the multi-client data it will be able to license or at what price. There can be no assurance that the Company will be able to recover all costs and investments associated with acquiring and processing multi-client data. If there is a material adverse change in the general prospects for oil and gas exploration, development and production activities in areas where the Company acquires multi-client data, the value of such multi-client data could be impaired and the Company could be required to take a charge against its earnings. The value of multi-client data could also be impaired by technological or regulatory changes and by other industry or general economic developments. In general, the Company's future sales of multi-client data licenses are uncertain and depend on a variety of factors, many of which will be beyond the Company's control.

2.2.7 Operating risks

The Company's assets are concentrated in a single industry and the Group may be more vulnerable to particular economic, political, regulatory, environmental or other developments than a company with a more diversified portfolio of revenue generating activities. It is not possible to give any guarantees that the vessels will be employed for the duration of their service life. There is an inherent exposure to technical risks, which may lead to operational problems, increased operational costs and/or loss of earnings, additional investments, penalty payments, and other such costs which may have a material effect on the earnings and financial position of the Company.

The seismic data acquisition operations are exposed to extreme weather and other hazardous conditions. In particular, a substantial portion of the Group's operations are subject to risks that are customary for marine operations, including capsizing, grounding, collision, interruption and damage or loss from severe weather conditions, fire, explosions and environmental contamination from spillage. Any of these risks, whether in the marine or

26

onshore operations, could result in damage to or destruction of vessels or equipment, injury to personnel or property damage, and/or suspension of operations or environmental damage. In addition, the operations involve risks of a technical and operational nature due to the complex systems that are utilized. If any of these risks materialize, the Group's business could be interrupted and the Group could incur significant liabilities. In addition, many similar risks may result in curtailment or cancellation of, or delays in exploration and production activities of the Group's customers, which could in turn adversely impact the Group's operations and/or reputation.

2.2.8 Technology may become obsolete

The Company's technology could be rendered obsolete as new and enhanced products and services are introduced to the seismic market. The Group's success depends to a significant extent on its ability to source, develop and produce new and enhanced products and services on a cost effective and timely basis in accordance with industry demands. While the Group commits resources to research and development, it may encounter resource constraints or technical or other difficulties that could delay introduction of new and enhanced products and services in the future. In addition, continuing development of new products and services inherently carries the risk of obsolescence of older products and services. New and enhanced products and services, if introduced, may not gain market acceptance or may be adversely affected by technological changes.

2.2.9 Commodity Prices

Polarcus is exposed to the impact of market fluctuations in the price of certain key commodities and specifically, oil prices, fuel and transportation costs. Any large fluctuations in these prices driven by the global economy, exacerbated further by exchange rate fluctuations, could materially impact future operating results.

2.2.10 Tax

Operating internationally, Polarcus will be subject to taxation in several jurisdictions around the world. With increasingly complex and changing tax regulations and interpretation of these regulations, the taxation on the Company could increase in certain jurisdictions. The Company may also in the future be subject to review of past years tax returns and be subjected to additional taxes and penalties. These conditions may have a material effect on the Company's financial results.

If Polarcus is controlled by Norwegian taxpayers, the Norwegian CFC-regulation ("NOKUS"-rules) may, in certain conditions, result in the Company being taxed under Norwegian law as if it had been a Norwegian company. Pursuant to the Company's Articles of Association, the Company may refuse to accept shareholder positions leading to the CFC-regulations becoming applicable. Also, other amendments to applicable tax provisions may have a negative impact on the return on the investment of Norwegian taxpayers.

2.2.11 Litigation

Due to the nature of the Group's business, the Group will be involved in litigation matters and other disputes from time to time. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, tort claims, intellectual property disputes, securities claims, employment matters and governmental claims for taxes or duties as well as other litigation that arises in the ordinary course of business. In particular, the Group cannot predict with certainty the outcome of any claim or litigation matter. The ultimate outcome of any litigation matter and the potential costs associated with prosecuting or defending such lawsuits, including the diversion of management's attention to these matters, could have a material adverse effect on the Group's business, revenue, profit and financial condition.

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2.3 Risks factors related to finance

2.3.1 Access to funding

The Company may require additional capital in the future due to unforeseen liabilities or in order for it to take advantage of opportunities for acquisitions, joint ventures or other business opportunities that may be identified by the Company. Any negative development in sales, gross margins or sales processes, may lead to a strained liquidity position and the potential need for additional funding through equity financing, debt financing or other means. Any additional equity financing may be dilutive to existing shareholders.

Should the current working capital and cash flow from operations not be sufficient to meet the Company's financing needs, the Company may be forced to reduce or delay capital expenditures or research and development expenditures, or sell assets or businesses at unanticipated times and/or at unfavourable prices or other terms, or to seek additional equity capital or to restructure or refinance its debt. There can be no assurance that such measures would be successful or adequate to meet debt and other obligations as they fall due, or that such measures would not result in the Company being placed in a less competitive position.

2.3.2 Financial leverage and breach of covenants

The financial leverage of the Company or any breach of covenant (or other circumstances which entail that loans fall due prior to the final maturity date) may have several adverse consequences, including the need to refinance, restructure or dispose of certain parts of the Company's businesses in order to fulfil the Company's financial obligations. For a summary of covenants and terms of the Company's loan arrangements, reference is made to Section 9.8.1 "Operating and financial information—Summary of financing".

2.3.3 Defaults and insolvency of subsidiaries

In the event of insolvency, liquidation or a similar event relating to one of the Company's subsidiaries, all creditors of such subsidiary would be entitled to payment in full out of the assets of such subsidiary before the Company, as a shareholder, would be entitled to any payments. Defaults by, or the insolvency of, certain subsidiaries of the Company could result in the obligation of the Company to make payments under parent financial or performance guarantees in respect of such subsidiaries' obligations under executed seismic survey contracts, loans or the occurrence of cross defaults on certain borrowings of the Company or other Group companies. There can be no assurance that the Company and its assets would be protected from any actions by the creditors of any subsidiary of the Company, whether under bankruptcy law, by contract or otherwise.

2.3.4 Exchange rate fluctuations

Currency exchange rate fluctuations and currency devaluation could have a material impact on the Company's results from time to time. Historically, most of the Company's income and expenses have been denominated in USD, GBP, NOK, AUD, RUB and EUR. The Company predominately sells its products and services in USD while a high portion of the operating expenses are incurred in NOK, GBP and EUR. A depreciation of the USD will have an adverse effect on the Company's financial performance as the Company will typically have higher revenues than expenses denominated in USD. The Company's debt is predominately denominated in USD. Currency fluctuations relative to the NOK of an investor's currency of reference may adversely affect the value of an investor's investments.

2.3.5 Uncertainty with respect to exercise of call option

It is not certain that the Company will have sufficient liquidity to exercise the call options under CB Trance B1, CB Tranche B2 and the Unsecured Bonds at the reduced call option prices. In the event such call options are not exercised, the debt under CB Trance B1, CB Tranche B2 and the Unsecured Bonds will have to be repaid at par value.

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2.3.6 Debt service and increased charter rates from 1 January 2019

From 1 January 2019, the Group will have to service the repayment instalments under the Fleet Bank Facility and the charter rates under the Bareboat Charter Agreement will increase as described in more detail under Section 8.8.3 "Business—Material contracts—Lease of POLARCUS NADIA and POLARCUS NAILA". In addition, the Company will have to pay interest on the Unsecured Bonds, CB Tranche B1 and CB Tranche B2 from 1 January 2019. The ability to make principal and interest payments when due, and to fund ongoing operations, including payment of increased charter rates, will depend on the Group's future performance and ability to generate cash and profit, which is subject to market conditions and general economic, financial and competitive factors beyond the Group's control.

2.3.7 Cash sweep

In connection with the Restructuring, a cash sweep mechanism was included in the convertible bond loan, the Fleet Bank Facility and the Bareboat Charter Agreements. Consequent to the 2017 Amendments, the cash sweep mechanism implies that in the period until the earlier of (i) 1 January 2019, and (ii) the date on which all deferred amortisations from March 2015 to 31 December 2018 (or any other deferred payment agreed between the parties to the Fleet Bank Facility) under the Fleet Bank Facility have been paid in full to the lenders thereunder, any excess cash shall be distributed to and between holders of A bonds (18%), the lenders under the Fleet Bank Facility (67%) and the Owner (15%) until 1 January 2018, and thereafter 100% to the lenders under the Fleet Bank Facility. Excess cash is defined as any amount of the Group's cash in excess of USD 75,000,000 (including any available and undrawn part of the working capital facility) excluding any amount of cash generated from sale of the Group's assets (net of any relevant secured debt on such assets) and/or excluding any amount generated from the raising of new equity, for the purpose of calling the Unsecured Bonds.

2.4 Risk factors related to the Shares

2.4.1 Volatility of share price

There can be no assurance that an active market for the Company's Shares can be sustained. The Company's share price may experience substantial volatility.

The market price of the Shares could fluctuate significantly. Factors that influence share prices include, but are not limited to:

general conditions within the oil industry;

actual or anticipated variations in operating results;

changes in financial estimates or recommendations by stock market analysts regarding the Company or its competitors;

announcements by the Company or its competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

sales or purchases of substantial blocks of Shares;

additions or departures of key personnel;

future equity or debt offerings by the Company and its announcement of these offerings;

general market and economic conditions; and

rumours and speculation in the market.

Moreover, in recent years the stock market in general has experienced large price

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fluctuations. These broad market fluctuations may adversely affect the Company's stock price, regardless of its operating results.

2.4.2 Risks related to the issuance of Shares or other securities

As of the date of this Prospectus, the Company has an authorised share capital of USD 19,567,097.7956 divided into 1,878,341,579 Shares of par value USD 0.01, of which 1,530,472,947 Shares are issued and 602,832,312 Class B shares with nominal value of USD 0.0013 each, of which none are in issue.

The Company's board of directors (the "Board" or the "Board of Directors") is authorised to issue the remaining 347,868,632 authorised Shares of par value USD 0.01 to provide sufficient flexibility with regard to future equity capital injections, in order, for example, to maintain adequate equity levels and working capital and to make provision for raising capital for the exercise of call options in relation to the Company's bonds as well as for general corporate purposes.

With regard to the 602,832,312 Class B shares of par value USD 0.0013, under Cayman Islands law, the Board of Directors is authorized to distribute these Shares. However, given that these Shares were originally authorized, issued and repurchased in connection with the 2016 Restructuring, the Board of Directors would seek a fresh mandate from the shareholders before issuing these Shares again.

If the Company decides to offer additional Shares in the future for other reasons, such offering may be made at a significant discount to the prevailing market price and could have a material adverse effect on the market price of the outstanding Shares.

2.4.3 Risks associated with dilution

Due to regulatory requirements under foreign securities laws or other factors, foreign investors may not be able to participate in a new issuance of Shares or other securities and may face dilution as a result. Any investor that is unable or unwilling to participate in the Company's future share issuances will have their percentage shareholding diluted. Further, if foreign holders of the Shares are not able to receive, trade or exercise pre-emptive rights granted in respect of their Shares in any rights offering by the Company, then they may not receive the economic benefit of such rights. In addition, their proportional ownership interests in the Company will be diluted.

2.4.4 Additional risks for holders of Shares that are registered in a nominee account

Beneficial owners of Shares that are registered in a nominee account (e.g., through brokers, dealers or third parties) may not be able to vote such Shares unless their ownership is re-registered in their names with the VPS prior to the Company's general meetings. The Company cannot guarantee that beneficial owners of the Shares will receive the notice for a general meeting in time to instruct their nominees to either effect a re-registration of their Shares or otherwise vote their Shares in the manner desired by such beneficial owners. For more information, see Section 12.2.27 "Shareholder matters".

2.4.5 Enforceability of civil liabilities in Cayman Island

The Company is incorporated under the laws of Cayman Islands. The rights of the shareholders are governed by Cayman Islands law and by the Company's Articles of Association. These rights may differ from the rights of a shareholder in other jurisdictions. As a result, it may, inter alia, not be possible for non-Cayman Islands investors to effect service of process on the Company or its directors in the shareholder's own jurisdiction, or to enforce against the Company judgments obtained in non-Cayman Islands courts.

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2.4.6 Transfer restrictions under the securities laws of United States and other jurisdictions

The Company has not registered its Shares under the U.S. Securities Act or the securities laws of other jurisdictions other than Norway, and the Company does not expect do so in the future. The Shares may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S under the U.S. Securities Act), nor may they be offered or sold in any other jurisdiction in which the registration of the Shares is required but has not taken place, unless an exemption from the applicable registration requirement is available or the offer or sale of Shares occurs in connection with a transaction that is not subject to these provisions. In addition, there can be no assurances that shareholders residing or domiciled in the United States will be able to participate in future capital increases.

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3. RESPONSIBILITY FOR THE PROSPECTUS

This Prospectus has been prepared in connection with the Offering and the listing of the New Shares and the Offer Shares.

The Board of Directors of the Company hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.

21 March 2017

Peter Rigg Chairman

Carl Peter Zickerman Board member

Arnstein Wigestrand Board member

Karen El-Tawil Board member

Erik Mathiesen Board member

Tom Henning Slethei Board member

Nicholas Smith Board member

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4. GENERAL INFORMATION

4.1 Presentation of financial and other information

The Company's audited financial statements as of, and for the years ended 31 December 2015, 2014 and 2013, and its unaudited financial statements for the three and twelve months ended 31 December 2016, have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) ("IFRS") (collectively referred to as the "Annual Financial Statements"). The Annual Financial Statements are included by reference in this Prospectus. The Company's financial statements as of, and for the years ended 31 December 2015, 2014 and 2013 have been audited by Ernst & Young AS, as set forth in its report thereon included by reference in this Prospectus.

4.2 Rounding

Percentages and certain amounts included in this Prospectus have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be the precise sum of the figures that precede them.

4.3 Industry and market data

This Prospectus contains statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to the Group's business and the industries and markets in which it operates. Unless otherwise indicated, such information reflects the Group's estimates based on analysis of multiple sources, including data compiled by professional organisations, consultants and analysts and information otherwise obtained from other third party sources, such as annual and interim financial statements and other presentations published by listed companies operating within the same industry as the Group, as well as the Group's internal data and its own experience, or on a combination of the foregoing. Unless otherwise indicated in the Prospectus, the basis for any statements regarding the Group's competitive position is based on the Company's own assessment and knowledge of the market in which it operates.

The Company confirms that where information has been sourced from a third party, such information has been accurately reproduced and that as far as the Company is aware and is able to ascertain from information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. Where information sourced from third parties has been presented, the source of such information has been identified. The Company does not intend, and does not assume any obligations to, update industry or market data set forth in this Prospectus.

Industry publications or reports generally state that the information they contain has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. The Company has not independently verified and cannot give any assurances as to the accuracy of market data contained in this Prospectus that was extracted from these industry publications or reports and reproduced herein. Market data and statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market.

As a result, prospective investors should be aware that statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data in this Prospectus and projections, assumptions and estimates based on such information may not be reliable indicators of the Company's future performance and the future performance of the industry in which it operates. Such indicators are necessarily subject to a high degree of uncertainty and risk due to the limitations described above and to

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a variety of other factors, including those described in Section 2 "Risk factors" and elsewhere in this Prospectus.

4.4 Forward-looking statements

This Prospectus contains forward-looking statements. All statements contained in this Prospectus other than statements of historical fact, including statements regarding the Company's future results of operations and financial position, its business strategy and plans, and its objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs.

Forward-looking statements are subject to a number of risks and uncertainties, including those described in Section 2 "Risk factors", and are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group operates. The actual results, performance or achievements of the Group may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance, or achievements. Given these uncertainties, investors should not rely upon forward-looking statements as predictions of future events or performance.

Except as required by the applicable law or stock exchange rules, the Company does not intend, and expressly disclaims any obligation or undertaking, to update any of these forward-looking statements after the date of this Prospectus or to conform these statements to actual results or revised expectations.

Forward-looking statements are found in Sections 7 "Industry and market", 8 "Business", 9 "Operating and financial information", 10 "Board of Directors, Management and employees" and 12 "Corporate information and description of the share capital", and include statements regarding the Company's management's intent, belief or current expectations with respect to, among other things:

strategies for the Company's services, segments and business, as well as for the Company as a whole;

global and regional economic conditions;

supply and demand for seismic related services;

sales volumes, price levels, costs and margins;

competition and actions by competitors and others affecting the global or regional market within the seismic industry, including changes to industry capacity and utilization and pricing of services;

the Company's planned capacity and utilization rates;

fluctuations in foreign exchange rates; earnings, cash flows, dividends and other expected financial results and conditions;

cash requirements and use of available cash;

financing plans;

anticipated capital spending;

growth opportunities;

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development, production, commercialization and acceptance of new services and technologies; and

environmental and other regulatory matters.

No forward-looking statements contained in this Prospectus should be relied upon as predictions of future events. No assurance can be given that the expectations expressed in these forward-looking statements will prove to be correct. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealized.

4.5 Manager

The Company has engaged ABG Sundal Collier ASA as Manager of the Private Placement and the Offering. The Manager has been acting for the Company and no one else in this respect. The Manager will not be responsible to anyone other than the Company for providing the protections afforded to clients of the Manager or for providing advice in relation to the listing. In the ordinary course of their businesses, the Manager and certain of their respective affiliates have engaged, and may continue to engage, in investment and commercial banking transactions with the Company and its subsidiaries.

4.6 No advice

The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax advice in relation to any subscription, purchase or proposed subscription or purchase of any New Shares or any Offer Shares. Each prospective investor should consult with such advisers as needed to make its investment decision and to determine whether it is legally permitted to hold the Shares under applicable legal, investment or similar laws or regulations. Investors should be aware that they may be required to bear the financial risks of any investment in the Shares for an indefinite period of time.

4.7 Third party information

In certain sections of the Prospectus, information sourced from third parties has been reproduced. In such cases, the source of the information is always identified. Such third party information has been accurately reproduced. As far as the Company is aware, and is able to ascertain from information published by the relevant third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

4.8 Enforcement of civil liability

The Company is a public limited liability company incorporated under the laws of the Cayman Islands. As a result, the rights of holders of the Company's Shares will be governed by the laws of the Cayman Islands and the Company's Articles of Association. The rights of shareholders under the laws of the Cayman Islands may differ from the rights of shareholders of companies incorporated in other jurisdictions. The majority of the members of the Company's board of directors (the "Board Members" and the "Board of Directors", respectively) and all of the members of the senior management of the Group (the "Management") are not residents of the United States, and almost all of the Group's assets are located outside the United States. As a result, it may be difficult for investors in the United States to effect service of process on the Company or its Board Members and members of Management in the United States or to enforce in the United States judgments obtained in U.S. courts against the Company or those persons, including judgments based on the civil liability provisions of the securities laws of the United States or any State or territory within the United States. Uncertainty exists as to whether courts in the Cayman Islands will enforce judgments obtained in other jurisdictions, including the United States, against the Company or its Board Members or members of Management under the securities laws of those jurisdictions or entertain actions in the Cayman Islands against the Company or its

35

Board Members or members of Management under the securities laws of other jurisdictions. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in the Cayman Islands. The United States and the Cayman Islands do not currently have a treaty providing for reciprocal recognition and enforcement of judgements (other than arbitral awards) in civil and commercial matters.

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5. PRIVATE PLACEMENT

5.1 The Private Placement and the New Shares

On 10 February, the Company announced that it had conditionally allocated binding subscriptions of 1,000,000,000 New Shares at a subscription price of NOK 0.33 per share in the Private Placement directed to certain institutional investors. The total gross proceeds of the Private Placement amounted to NOK 330,000,000.

5.2 Proceeds of the Private Placement and use thereof

The gross proceeds to the Company from the Private Placement amounted to NOK 330 million. The costs and expenses of, and incidental to, the listing of the New Shares amounted to approximately USD 2.5 million (approximately NOK 21.2 million). Based on this, the net proceeds to the Company amounted to approximately NOK 309 million.

The cash received as proceeds from subscriptions for cash for Private Placement Shares in the Private Placement will be used to pay the fees and expenses of the Private Placement and to strengthen the Company's liquidity position as well as for general corporate purposes.

5.3 Resolution to issue New Shares

On 7 February 2017, the Company's Board of Directors resolved that, subject to shareholder approval being obtained, the issue of the New Shares be approved.

"Upon motion duly made, seconded and carried unanimously, IT WAS RESOLVED that, subject to Shareholder Approval being obtained:

(a) the issue of the Placement Shares to investors and existing shareholders, fully paid, in accordance with the terms of the Private Placement and Repair Issue be and is hereby approved."

The extraordinary general meeting of the Company held on 6 March 2017 passed the following resolution to increase the share capital in connection with the issuance of New Shares:

"The shareholders resolve by Ordinary Resolution that:

(a) the authorized share capital of the Company be and is hereby increased as follows:

FROM: US$8,347,097.7956 divided into 756,341,579 shares of a nominal or par value of US$0.01 each and 602,832,312 Class B shares of a nominal or par value of US$0.0013 each;

TO: US$ 19,567,097.7956 divided into 1,878,341,579 shares of a nominal or par value of US$0.01 each and 602,832,312 Class B shares of a nominal or par value of US$0.0013 each;

(b) paragraph 6 of the Memorandum of Association of the Company be and is hereby amended to reflect the increase in and amendment to the authorized share capital as approved in resolution 1.1(a) above in accordance with section 13(1) of the Companies Law (as amended) of the Cayman Islands."

5.4 Share capital following completion of the Private Placement

The Company's issued share capital following the completion of the Private Placement is 15,304,729.47 divided into 1,530,472,947 Shares of a par value of USD 0.01 each.

The Company's authorized share capital following the completion of the Private Placement is USD 19,567,097.7956 divided into 1,878,341,579 Ordinary Shares of a nominal or par value

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of USD 0.01 each and 602,832,312 Class B shares of a nominal or par value of USD 0.0013 each.

5.5 Dilution

Following completion of the Private Placement, the aggregate dilution for the existing shareholders is approximately 65.3%.

5.6 The New Shares

The New Shares are issued in accordance with Cayman Islands law. The New Shares rank pari passu in all respects with the Company's Ordinary Shares and carry full shareholder rights in the Company from the time of issuance. The New Shares are eligible for any dividends which the Company may declare after such date. For a description of rights attached to the New Shares, see Section 12 "Corporate information and description of the share capital".

The New Shares have been listed and tradeable on Merkur Markets, with ticker code "PLCS-ME" under a separate ISIN number being KYG7153K1572 for the period between issuance of the New Shares and the approval of this Prospectus.

The New Shares are expected to be listed on Oslo Børs from 22 March 2017.

5.7 VPS registration and delivery of the New Shares

The New Shares are registered in the VPS under ISIN KYG7153K1572. With effect from the listing thereof, the New Shares will be registered in the VPS under ISIN KYG7153K1085, which is the same ISIN as the Company's Ordinary Shares are registered under. The Company's register of shareholders with the VPS is administrated by DNB Bank ASA, Verdipapirservice, Dronning Eufemias gate 30, 0191 Oslo. It is expected that trading in the New Shares will commence on Oslo Børs on or about 22 March 2017.

5.8 Selling and transfer restrictions

For a description of selling restrictions applicable to the Private Placement, see Section 16 "Selling and transfer restrictions".

5.9 Advisors

ABG Sundal Collier ASA, Munkedamsveien 45E, 0250 Oslo, Norway is acting as Manager in the Private Placement. Advokatfirmaet Wiersholm AS, Dokkveien 1, 0250 Oslo, Norway is acting as legal advisor to the Company in respect to Norwegian Law.

5.10 Expenses

The total expenses of the Private Placement are estimated to amount to approximately USD 2.5 million.

5.11 Lock-up

No lock-up agreements were entered into in connection with the Private Placement.

5.12 Interest of natural and legal persons involved in the Private Placement

The Manager or its affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager does not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Manager will receive a management fee in connection with the 2017 Amendments and, as such, have an interest in the Private Placement.

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Beyond the above-mentioned, the Company is not aware of any interest, including conflicting ones, of any natural or legal persons involved in the Private Placement.

5.13 Jurisdiction

The New Shares were issued pursuant to the Companies Law (2007 revision) of the Cayman Islands as amended from time to time.

This Prospectus is subject to Norwegian law. Any dispute arising in respect of this Prospectus is subject to the exclusive jurisdiction of the Norwegian courts with Oslo City Court as legal venue in the first instance.

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6. THE OFFERING

This Section sets out the terms and conditions pursuant to which all applications for Offer Shares in the Offering are made. Investing in the Offer Shares involves inherent risks. In making an investment decision, each prospective investor must rely on its own examination, analysis of and enquiry into the Company and the terms of the Offering, including the merits and risks involved. Neither the Company nor the Manager, or any of their respective representatives or advisers, are making any representation to any offeree or purchaser of the Offer Shares regarding the legality of an investment in the Offer Shares by such offeree or purchaser under the laws applicable to such offeree or purchaser. Each investor should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the Offer Shares. Prospective investors should read this Section in conjunction with the other parts, in particular Section 2 "Risk factors".

6.1 The Offering

6.1.1 Overview

The Offering comprises an offering of up to 122,000,000 Offer Shares each with a nominal value of USD 0.01, at a Subscription price of NOK 0.33 per Offer Share, corresponding to gross proceeds of up to NOK 40 million (approximately USD 5 million).

Eligible Shareholders in the Offering will be granted non-transferable Subscription Rights that, subject to applicable laws, provide rights to subscribe for and be allocated Offer Shares. Over-subscription and subscription without Subscription Rights will be permitted; however there can be no assurance that Offer Shares will be allocated for such subscriptions.

Subscription Rights and Offer Shares will not be granted, issued or offered in certain jurisdictions or to residents of certain jurisdictions. For further information see Section 16 "Selling and transfer restrictions".

6.1.2 Resolution regarding the Offering

On 7 February 2017, the Company's Board of Directors resolved that, subject to shareholder approval being obtained, the increase of the Company's share capital in connection with the Private Placement and the Offering:

"Upon motion duly made, seconded and carried unanimously, IT WAS RESOLVED that, subject to Shareholder Approval being obtained:

(a) the issue of the Placement Shares to investors and existing shareholders, fully paid, in accordance with the terms of the Private Placement and Repair Issue be and is hereby approved."

The extraordinary general meeting of the Company held on 6 March 2017 passed the following resolution to increase the Company's share capital in connection with the Private Placement and the Offering:

"The shareholders resolve by Ordinary Resolution that, subject to the passing of the resolutions set out at paragraphs 1.1(a) and 1.1(b) above:

(a) The Private Placement and the Subsequent Offering be and are hereby approved and ratified and the Board be authorized to determine and finalize the subscription price for the issue of Ordinary Shares and the other terms of the Private Placement and the Subsequent Offering.

(b) The issue by the Company of up to 1,000,000,000 new Ordinary Shares to investors in connection with the Private Placement as determined by the Board and on such terms as the Board thinks fit be and is hereby approved.

(c) The issue by the Company of up to 122,000,000 new Ordinary Shares to existing

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shareholders in connection with the Subsequent Offering as determined by the Board and on such terms as the Board thinks fit be and is hereby approved."

6.1.3 Timetable

The timetable below provides certain indicative dates for the Offering, assuming duly payment of the Offer Shares subscribed for and allocated in the Offering:

Last day of trading in the Shares including Subscription Rights: 9 February 2017

Ex. Rights trading in the Shares commenced on Oslo Børs: 10 February 2017

Record Date: 13 February 2017

Subscription Period commences: 22 March 2017 at 09:00 hours (CET)

Subscription Period ends: 5 April 2017 at 12:00 (CET)

Allocation of the Offer Shares: 6 April 2017 (expected)

Distribution of the allocation letters: 6 April 2017 (expected)

Payment Date: 7 April 2017

Registration of the share capital increase: On or about 10 April 2017 (expected)

Delivery Date for the Offer Shares: On or about 10 April 2017 (expected)

Listing and commencement of trading in the Offer Shares on Oslo Børs:

On or about 10 April 2017 (expected)

6.1.4 Subscription Rights

Eligible Shareholders of the Company as of the end of 9 February 2017, as registered in the VPS on the Record Date, who did not participate in the Private Placement, and who are not resident in a jurisdiction where such offering would be unlawful, or for jurisdictions other than Norway, would require any filing, registration or similar action, will be granted non-transferable Subscription Rights giving a right to subscribe for, and be allocated, Offer Shares in the Offering. Each Eligible Shareholder will, subject to applicable securities laws, be granted 0.33 non-transferable Subscription Rights for each existing Share registered as held by such Eligible Shareholder as of the Record Date. The number of Subscription Rights granted to each Eligible Shareholder will be rounded down to the nearest whole Subscription Right.

The Subscription Rights will be registered in the VPS on ISIN KYG7153K1655 and will be distributed to each Eligible Shareholder's VPS account on or about 6 April 2017.

Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one Offer Share in the Offering. Over-subscription (i.e. subscription for more Offer Shares than the number of Subscription Rights allocated to the subscriber) and subscription without Subscription Rights will be permitted; however there can be no assurance that Offer Shares will be allocated for such subscriptions.

The Subscription Rights must be used to subscribe for Offer Shares before the end of the Subscription Period (i.e. before 5 April 2017 at 12:00 hours (CET)). Subscription Rights that are not exercised before 5 April 2017 at 12:00 hours (CET) will have no value and will lapse without compensation to the holder. Holders of Subscription Rights should note that

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subscriptions for Offer Shares must be made in accordance with the procedures set out in this Prospectus and that holding of Subscription Rights in itself does not represent a subscription for Offer Shares.

Shareholders resident in jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company's assessment, prohibits or otherwise restricts subscription for Offer Shares, and shareholders who participated in the Private Placement (the "Ineligible Shareholders") will not receive Subscription Rights. Eligible Shareholders should be aware that the exercise of Subscription Rights by holders who are located in countries outside of Norway may be restricted or prohibited by applicable securities laws. Please refer to Section 6.6 "Selling Restrictions and restrictions on distribution of Subscription Rights" below for a further description of such restrictions.

6.1.5 Record Date

Eligible Shareholders who receive Subscription Rights are the shareholders registered in VPS at the end of the Record Date, i.e. on 13 February 2017.

Provided that the delivery of traded Shares was made with ordinary T+2 settlement in the VPS, Shares that were acquired until and including 9 February 2017 will give the right to receive Subscription Rights, whereas Shares that were acquired from and including 10 February 2017 will not give the right to receive Subscription Rights.

6.1.6 Subscription Period

The Subscription Period for the Offering will commence at 09:00 hours (CET) on 22 March 2017 and end at 12:00 hours (CET) on 5 April 2017.

The Subscription Period may be shortened or extended.

6.1.7 Subscription Price

The Subscription Price in the Offering is NOK 0.33 per Offer Share.

For an overview of the effective cash cost for members of the Management and the Board of Directors of acquiring Shares or rights to Shares during the last year, please see Section 12 "Corporate information and description of the share capital".

6.1.8 Subscription Procedures

Subscriptions for Offer Shares in the Offering must be made by submitting a correctly completed Subscription Form in the form included in Appendix 1 to the Manager during the Subscription Period or may, for Norwegian citizens, be made online as further described below.

Subscribers who are Norwegian citizens may also subscribe for Offer Shares in the Offering through the VPS online subscription system (or by following the link www.abgsc.com which will redirect the subscriber to the VPS online subscription system). All online subscribers must verify that they are Norwegian citizens by entering their national identity number (Norwegian: "personnummer").

Correctly completed Subscription Forms must be received by the Manager or, in the event of online subscription in the VPS, correctly completed subscription must be registered, no later than 12:00 hours (CET) on 5 April 2017 at the following address or e-mail:

http://www.abgsc.com/

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ABG Sundal Collier ASA Munkedamsveien 45D P.O. Box 1444 Vika

N-0115 Oslo Norway

Phone: + 47 22 01 61 73 Email:

[email protected] www.abgsc.com

Subscribers who are Norwegian citizens may also subscribe for Offer Shares by following the links on www.abgsc.com, which will redirect the subscriber to the VPS online subscription system. In order to use the online subscription system, the subscriber must have, or obtain, a VPS account number. All online subscribers must verify that they are Norwegian citizens by entering their national identity number (Norwegian: "personnummer").

None of the Company or the Manager may be held responsible for postal delays, internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all by the Manager. Subscription Forms received by the Manager, or subscriptions registered in the VPS, after the end of the Subscription Period and/or incomplete or incorrect Subscription Forms and any subscription that may be unlawful may be disregarded at the sole discretion of the Company and the Manager without notice to the subscriber.

Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after having been received by the Manager or registered in the VPS. The subscriber is responsible for the correctness of the information filled into the Subscription Form or registered when subscribing online in the VPS. By signing and submitting a Subscription Form or submitting an online subscription in the VPS, each subscriber confirms and warrants to have read this Prospectus and to be eligible to subscribe for Offer Shares under the terms set forth herein.

There is no minimum subscription amount for which subscriptions in the Offering must be made. Oversubscription (i.e. subscription for more Offer Shares than the number of Subscription Rights held by the subscriber entitles the subscriber to be allocated) will be permitted; however there can be no assurance that Offer Shares will be allocated for such subscriptions.

Multiple subscriptions (i.e. subscriptions on more than one Subscription Form) are allowed. Please note, however, that each separate Subscription Form submitted by the same subscriber with the same number of Offer Shares subscribed for on both Subscription Forms will only be counted once, unless otherwise explicitly stated in one of the Subscription Forms. In the case of multiple subscriptions through the VPS online subscription system or subscriptions made both on a Subscription Form and through the VPS online subscription system, all subscriptions will be counted.

6.1.9 Allocation

Allocation of the Offer Shares is expected to take place on or about 6 April 2017.

The allocation of Offer Shares to subscribers in the Offering shall be made pursuant to the following criteria:

a. Allocation will be made to subscribers on the basis of granted Subscription Rights which have been validly exercised during the Subscription Period.

b. If not all Subscription Rights are exercised, subscribers having exercised their Subscription Rights and who have over-subscribed will be allocated additional new Offer Shares on a pro rata basis based on the number of Subscription Rights exercised by each such subscriber. To the extent pro rata allocation is not possible, the allocation

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shall be determined by drawing of lots.

c. Any remaning Offer Shares not allocated pursuant to the criteria in items a. and b. will be allocated to subscribers not holding subscription rights. Allocation will be sought made pro rata based on the respective subscription amounts, provided, however, that such allocations may be rounded down.

The Board reserves the right to round off, reject or reduce any subscription for Offer Shares not covered by Subscription Rights on the on basis of criteria such as (but not limited to) current ownership in the Company relative to orders size, sector knowledge, perceived investor quality and investment horizon.

No fractional Offer Shares will be allocated. Allocation of fewer Offer Shares than subscribed for will not impact the subscribers' obligation to pay for the number of Offer Shares allocated.

Notifications of allocated Offer Shares in the Offering and the corresponding amount to be paid by each subscriber will be set out in a letter from the Manager, which will be mailed on or about 6 April 2017. The Company expects to issue a stock exchange notification announcing the results of the Offering on or about the same date. The results will also be available in the subscribers' accounts in VPS.

6.1.10 Payment Date for the Offer Shares

The Payment Date for the Offer Shares in the Offering is 7 April 2017.

When subscribing for Offer Shares in the Offering, each subscriber with a Norwegian bank account must provide a one-time irrevocable authorization to the Manager to debit a specified bank account with a Norwegian bank for the total subscription amount payable for the Offer Shares allocated to such subscriber. Accounts will be debited on or about the Payment Date, and there must be sufficient funds in the stated bank account from and including the date falling 2 banking days prior to the Payment Date. The Manager reserves the right (but has no obligation) to make up to three debit attempts within seven working days after the Payment Date if there are insufficient funds in the account on the first debiting date.

The subscriber furthermore authorizes the Manager to obtain confirmation from the subscriber's bank that the subscriber has disposal over the indicated account as well as a confirmation that there are sufficient funds in the account to cover the payment.

Subscribers who do not have a Norwegian bank account must ensure that payment for the allocated Offer Shares is made on or before the Payment Date.

Details and instructions regarding the settlement of allocated Shares can be obtained by contacting the Manager on telephone: +47 22 01 61 73. For company and market specific questions, or general questions regarding the background for the Offering, the Company can be contacted on: +971 443 60 800, or [email protected].

If there are insufficient funds in a subscriber's bank account or it is impossible to debit a bank account for the amount the subscriber is obligated to pay, or payment is not received by the Manager according to other instructions, the allotted Offer Shares will be withheld. Should any subscriber have insufficient funds in his or her account, should payment be delayed for any reason, if it is not possible to debit the account or if payments for any other reasons are not made when due, overdue interest will accrue and other terms will apply as further set out below.

Overdue and late payment will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue Payment on 17 December 1976 No. 100, currently 8.50% per annum. If the subscriber fails to comply with the terms of payment, the Offer Shares will not be delivered to the subscriber.

The Company and the Manager reserve the right to, at the cost and risk of the subscriber, cancel the allocation and to reallocate, sell, assume ownership of or otherwise dispose of all

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or parts of the allocated Offer Shares on such terms and in such manner as the Manager may decide in accordance with applicable law and otherwise based on the Board of Directors' discretion, without further notice to the subscriber in question if payment has not been received within the third day after the Payment Date. The non-paying subscribers will remain fully liable for payment for the Offer Shares together with any interest, costs, charges and expenses accrued, and if the Offer Shares are sold on behalf of the subscriber, the subscriber will be liable for any loss, costs, charges and expenses suffered or incurred by the Company and/or the Manager as a result of or in connection with such sales (however so that the applicant shall not be entitled to profits from such sale, if any). The Company and/or the Manager may enforce payment of any amounts outstanding in accordance with applicable law.

Any excess amount paid by an Eligible Shareholder will be returned as soon as possible following the Payment Date.

6.2 Participation of major existing shareholders and members of the Company's management, supervisory or administrative bodies in the Offering

The Company is not aware of any major shareholders of the Company or members of the Board of Directors or Management who intend to apply for Offer Shares in the Offering, or who intends to apply for more than 5% of the Offer Shares.

6.3 Delivery and listing of the Offer Shares

All subscribers subscribing for Offer Shares in the Offering must have a valid VPS account (established or maintained by an investment bank or Norwegian bank that is entitled to operate VPS accounts) to receive Offer Shares.

Delivery of the Offer Shares in the Offering will take place on or about 10 April 2017. Delivery of the Offer Shares issued in the Offering is expected to take place by registration of the Offer Shares in the VPS on or about 10 April 2017.

The Offer Shares issued in the Offering will be listed on Oslo Børs as soon as the Offer Shares issued in the Offering have been registered in the VPS.

The Offer Shares issued in the Offering may not be traded on Oslo Børs before they are fully paid, issued and registered in the VPS.

6.4 Mandatory anti-money laundering procedures

The Offering is subject to the Norwegian Act on Money Laundering No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009 (collectively the "AML Legislation").

All subscribers who are not registered as existing customers with the Manager must verify their identity to the Manager in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is available.

Subscribers that have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are exempted, provided the aggregate subscription amount is less than NOK 100,000, unless verification of identity is requested by the Manager. The verification of identification must be completed prior to the end of the Subscription Period. Subscribers who have not completed the required verification of identification will not be allocated Offer Shares.

Furthermore, participation in the Offering is conditional upon the subscriber holding a VPS account. The VPS account number must be stated on the Subscription Form. VPS accounts can be established with authorised VPS registrars which can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. However, non-Norwegian investors may use nominee VPS accounts registered in the

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name of a nominee. The nominee must be authorised by the Norwegian Financial Services Authority.

Establishment of VPS account requires verification of identification to the VPS registrar in accordance with the AML Legislation.

6.5 Financial intermediaries

All persons and entities holding Shares or Subscription Rights through financial intermediaries should read this Section 6.5 "Financial intermediaries". All questions concerning the timeliness, validity and form of instructions to a financial intermediary in relation to the exercise of Subscription Rights should be determined by the financial intermediary in accordance with its usual customer relations procedure; or as it otherwise notifies each shareholder.

Neither the Company nor the Manager is liable for any action or failure to act by a financial intermediary through whom shareholders of the Company hold their Shares.

6.5.1 Subscription Rights

If an Eligible Shareholder held the Shares through a financial intermediary on the Record Date, the financial intermediary will customarily give each Eligible Shareholder details of the aggregate number of Subscription Rights to which each Eligible Shareholder will be entitled. The relevant financial intermediary will customarily supply each Eligible Shareholder with this information in accordance with its usual customer relations procedures. Eligible Shareholders should contact their financial intermediary if they have received no information with respect to the Offering.

Shareholders who hold their Shares through a financial intermediary and who are Ineligible Shareholders will not be entitled to exercise their Subscription Rights transferred to the financial intermediary.

6.5.2 Subscription Period

The time until which notification of exercise instructions may be validly given may be earlier if Shares are held through a financial intermediary. This depends on the financial intermediary.

6.5.3 Subscription

If Eligible Shareholders hold their Subscription Rights through a financial intermediary and wish to exercise their Subscription Rights, they should instruct their financial intermediary in accordance with the instructions received from such financial intermediary. The financial intermediary will be responsible for collecting exercise instructions from the Eligible Shareholders and for informing the Manager of their exercise instructions.

6.5.4 Method of Payment

Eligible Shareholders holding their Subscription Rights through a financial intermediary should pay the Subscription Price for the Offer Shares that they are allocated in accordance with the instructions received from that financial intermediary. The financial intermediary must pay the Subscription Price to the Manager, who will in turn pay it to the Company. Payment for the Offer Shares must be made to the Manager no later than the Payment Date. Accordingly, financial intermediaries may require payment to be provided to them prior to the Payment Date.

6.6 Selling Restrictions and restrictions on distribution of Subscription Rights

Subscription Rights will not be issued to persons who are residents in the United States, Australia, New Zealand, Canada, Japan, South Korea or Brazil or in any jurisdiction where such issuance would be unlawful.

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The offering of the Offer Shares and the issue of the Subscription Rights in the Offering may in certain jurisdictions be restricted by law. The distribution of this Prospectus and the offering and sale of the Offer Shares offered hereby may also in certain jurisdictions be restricted by law. Persons in possession of this Prospectus are required to inform themselves about and to observe any such restrictions. This Prospectus may not be used for, or in connection with, and does not constitute, any offer to sell, or an invitation to purchase, any of the Offer Shares offered hereby in any jurisdiction in which such offer or invitation would be unlawful or restricted. No one has taken any action that would permit a public offering of Offer Shares to occur outside of Norway. Shareholders who reside in any country outside EU/EAA may not be permitted to receive Subscription Rights or Offer Shares.

The Subscription Rights and the Offer Shares have not been and will not be registered under the Securities Act or the securities laws of any state of the United States and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Offering is not being extended into the United States. Outside the United States, the Subscription Rights and Offer Shares are being offered to non-US persons in offshore transactions (each as defined in Regulation S) in reliance on Regulation S under the Securities Act. The Offer Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time.

See Section 16 "Selling and transfer restrictions" for a description of certain further restrictions on resale and transfer.

6.7 The Offer Shares

The Offer Shares will be Shares in the Company with a nominal value of USD 0.01 each, and will be issued electronically in the VPS in registered form in accordance with Cayman Islands law.

The Offer Shares will rank pari passu in all respects with the existing Shares and will carry full shareholder rights in the Company from the time of registration of the share capital increase pertaining to the Offering, which is expected to occur on or about 10 April 2017. The Offer Shares will be eligible for any dividends which the Company may declare after said registration. All Shares, including the Offer Shares, will have voting rights and other rights and obligations which are standard under the Companies Law, and are governed by Cayman Islands law. Please refer to Section 12 "Corporate information and description of the share capital" for a more detailed description of the Shares.

The Offer Shares will, upon delivery, be registered on the same ISIN as the existing Shares, being ISIN KYG7153K1085, and will be listed on Oslo Børs under ticker code "PLCS". The Company's registrar is DnB Bank ASA, Verdipapirservice, Dronning Eufemias gate 30, 0191 Oslo.

6.8 Shares following the Offering

Following completion of the Offering, the Company's issued and outstanding Shares will increase from 1,530,472,947 to maximum 1,652,472,947 Shares, assuming full subscription of the Offering.

The Company has only one class of issued shares outstanding and all Shares are freely transferable.

6.9 Dilution

The Private Placement resulted in a dilution of the then existing shareholders of the Company of approximately 65.3%. Taken together with the dilution resulting from the Private Placement, the Subsequent Offering, assuming that it is fully subscribed, will result in a

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dilution of the shareholders of the Company prior to the Private Placement, to the extent such shareholders elect not to participate in the Subsequent Offering, of approximately 67.9%.

6.10 Advisors

ABG Sundal Collier ASA acts as Manager and for the Offering. Advokatfirmaet Wiersholm AS acts as Norwegian legal counsel to the Company.

6.11 Net proceeds and expenses related to the Offering

The gross proceeds to the Company from the Offering will be approximately NOK 40.3 million assuming it is fully subscribed. The Company's total costs and expenses of, and incidental to, the Offering are estimated to amount to approximately NOK 1.2 million. Based on these assumptions the net proceeds to the Company will be NOK 39.1 million.

The cash received as proceeds from the Offering will be used to pay the fees and expenses of the Offering and to strengthen the Company's liquidity position as well as for general corporate purposes.

No expenses or taxes will be charged by the Company or the Manager to the applicants in the Offering.

6.12 Interests of natural and legal persons involved in the Offering

The Manager or its affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager does not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Manager will receive a management fee in connection with the Offering and, as such, have an interest in the Offering. See Section 6.11 "Net proceeds and expenses related to the Offering" for information on expenses related to the Offering.

Beyond the above-mentioned, the Company is not aware of any interest, including conflicting ones, of any natural or legal persons involved in the Offering.

6.13 Publication of information relating to the Offering

In addition to press releases, which will be posted on the Company's website, the Company will use Oslo Børs' information system www.newsweb.no) to publish information relating to the Offering. The results of the Offering are expected to be announced on or about 6 April 2017.

6.14 Jurisdiction and governing law

The Offer Shares will be issued pursuant to the Companies Law.

This Prospectus is subject to Norwegian law. Any dispute arising in respect of this Prospectus is subject to the exclusive jurisdiction of the Norwegian courts with Oslo City Court as legal venue in the first instance.

6.15 Lock-up

No lock-up agreements were entered into in connection with the Offering.

6.16 Supplementary Prospectus

In the event a significant new factor, material mistake or inaccuracy relating to the information included in this Prospectus arises which is capable of affecting the assessment of the Offer Shares and which arises between the time that the Prospectus is approved and the end of the Subscription Period or listing of the Offer Shares, the Company shall publish a

http://www.newsweb.no/

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supplementary prospectus.

Any supplementary prospectus will be published in the same manner as this Prospectus.

ABG Sundal Collier ASA, Munkedamsveien 45E, 0250 Oslo, Norway is acting as Manager in the Private Placement. Advokatfirmaet Wiersholm AS, Dokkveien 1, 0250 Oslo, Norway is acting as legal advisor to the Company in respect to Norwegian Law.

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7. INDUSTRY AND MARKET

7.1 Market overview

Polarcus owns and operates a fleet of high end 3D seismic acquisition vessels that generate revenue in the contract and multi-client market segments by acquiring geophysical seismic surveys. The industry considers "high end" vessels to be those that are capable of towing 8 streamers or more for the purposes of acquiring 3D seismic data and are operated under a management system recognized, audited and approved by global super-major and major oil companies. This is an important differentiation as such vessels deliver significant efficiencies through the size of the in-sea spreads that they are capable of towing.

A detailed explanation of the "contract" and "multi-client" market segments in which Polarcus operates is provided in section 8.3 "Business—Overview of business activities". A detailed explanation of the Polarcus vessels and their capabilities is provided in section 8 "Business".

7.1.1 Demand drivers

The market for geophysical seismic surveys is largely driven by the oil industry's incentives to invest in exploration, development and production. Their willingness to invest is a consequence of current revenues, (oil and gas prices) acreage available for exploration and production combined with the global oil and gas demand/supply balance. These factors are in turn affected by various political and economic factors, such as global production levels, prices of alternative energy sources, government policies, and the political stability in the oil producing countries. In general the demand for geophysical services is therefore driven by:

The demand/supply balance for oil and gas

Oil and gas companies‟ exploration and production ("E&P") spend

After a decade of growth in E&P spending from 1999, further growth was capped by the economic recession that started in 2008. The result was a decrease in year-on-year global exploration and production spending in 2009. The recession had a significant short-term impact on the global energy demand, illustrated by the severe drop in oil prices. In 2009, oil prices recovered and trended upwards. In 2011, the spot price of Brent averaged USD 111 per barrel, marking the first time the global benchmark averaged more than USD 100 per barrel for a year. In H2 2014, the oil price fell rapidly with Brent prices falling to USD 62 per barrel in December 2014, as supply fears waned with OPEC production hitting a two-year high. The oil price continued its rapid decline throughout 2015 reaching a low of USD 27 a barrel in January 2016, its lowest level since 2003. The rapid decline in oil prices has been driven by a number of factors: several years of increasing production of unconventional oil; weakening global demand; a significant shift in OPEC policy that has maintained production at relatively high levels; unwinding of some geopolitical risks; and an appreciation of the U.S. dollar. (Source: World Bank Group Policy Research Note, The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses, March 2015). The oil price has adjusted to a monthly average of USD 44 per barrel for full year 2016 on account of accelerating reductions in the U.S. rig count and market reactions to news of a potential OPEC/non-OPEC supply management. At the beinning of 2017 the oil price had stabilized in the short term at around USD 55 per barrel, the projected average oil price for 2017 is USD 55 per barrel, and for 2018 the projected price per barrel is USD 57 per barrel.1 By mid March the oil price was

1 Source: US Energy Information Administration; Brent Oil Price

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reduced to USD ~50 per barrel.2 The outlook for the industry remains cautious with a stable current and projected oil price providing some certainty, but a number of oil and gas companies maintain subdued exploration budgets.

0

20

40

60

80

100

120

140

160

Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16

USD/barrel

Seismic market demand Seismic acquisition is the primary tool used by the oil companies both to explore for new reserves, and lately, for field appraisal and development programs of already discovered and in some cases, producing fields. Licence concessions negotiated between oil companies and host governments regularly include seismic surveys in their work commitment obligations. The oil industry uses seismic data, particularly 3D seismic data, to identify and evaluate prospects within licensed acreage, increase the chance of geologic success of these prospects for the license holder, and de-risk the drilling phase that ultimately determines the success or otherwise of the oil companies' investment. Over the past three decades, the cost of such exploration programs has grown substantially which, combined with the historically delivered success rates of 20% - 25% on an exploration well, has fuelled the demand for more and higher quality 3D seismic surveys. The search for hydrocarbons has moved beyond the easy-to-find near surface reserves to more complex geological environments such as those found in the pre-salt geology present in the Gulf of Mexico, West Africa, offshore Brazil and more recently to remote frontier regions such as the Russian Arctic. That said, large scale 3D exploration has continued in certain markets previously inaccessible to the industry, or where a new exploration play has been identified and conditions for investment are supportive. Two examples of these are Myanmar, and the Northwest shelf of Australia. The recent rapid decline in oil price has temporarily slowed investment in some of these locations, however it is anticipated that this is a deferral of investment and that these challenging frontiers will pay an increasingly important role as future sources of hydrocarbon reserves.

2 Source: Brent Oil Price

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7.2 Seismic fleet overview

During 2015, the majority of seismic companies announced that they would cold stack and/or permanently retire a number of vessels and in some instances, postpone new build contracts. This lead to a significant reduction in the number of active vessels in the global seismic fleet in the first part of 2016. During 2016, the market has seen some reactivations and further stacking.

As of Q1 2017, the number of active 3D seismic vessels capable of towing more than 8 streamers is estimated at around 27. This number has reduced from more than 40 vessels early in 2015. The full effect of the global fleet reductions has not yet been seen in the market. It should be noted that there are currently an additional 11 vessels capable of towing 8 streamers or more that are "idle", meaning that they could be reactivated if there was increasing demand from clients.

The Company maintains a comprehensive database of the global 3D seismic fleet, and estimates only limited growth in the number of vessels through 2018. This will help ensure a more balanced supply/demand outlook for seismic in the short to medium term. The Company's vessels are all new–builds (delivered since 2009). They all incorporate many new and innovative technological features.

Polarcus estimates that it will maintain a market share of approximately 20% in 2017. This is estimated by monitoring the global fleet of active 3D vessels, as displayed in Figure 3.

During H2-2015 it was announced that Dolphin Geophysical (DOLP) had entered into liquidation. Subsequently, Shearwater Geophsyical AS (SGS) emerged and entered the marine seisemic market with three former DOLP vessels which were made available to the global market in Q4 2016. Additional market participants include WesternGeco (WG) , PGS, CGG and Polarcus (PLCS). All companies operate globally in both the contract and multi-client market segments.

Figure 3: Estimated High-end 3D vessels in the market, Source Polarcus

Thus, as per Q1 2017, Polarucs had 18% of the high-end 3D vessel market based on number of vessels.

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SGS11%

PLCS18%

PGS30%

CGG15%

WG26%

Figure 4: Estimated market share based on number of high-end 3D vessels in the market as of Q1 20173.

7.3 Positioning of Polarcus in the market

The Company has identified and implemented a number of significant technology developments in the current market. These developments have led to:

significant differentiation of the Polarcus service offering to clients;

penetration of market segments across marine seismic acquisition and data processing; and

growth of Polarcus revenue generation in these market segments.

Polarcus has focused its differentiating technologies on the two key value-creating considerations for clients:

improved efficiency of marine seismic acquisition which is typically measured in an increased number of 3D marine seismic square kilometres acquired per unit of time; and

improved quality of data acquired by the Polarcus fleet driven by: increased data sampling (number of data points per unit of distance in both X and Y directions; similar to increasing pixel counts in digital cameras and TVs), increased frequency content of the seismic data recorded, and improved signal-to-noise of the seismic data recorded

7.3.1 XArray™: Efficient and high quality 3D seismic acquisition

In 2014 Polarcus introduced an innovative acquisition technique termed XArray™ designed to deliver a highly efficient acquisition technique without compromising data quality.

3 Source: Polarcus management, Quarterly reports

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The 'X' in XArray refers to increasing the number of energy sources beyond the traditional dual (two) energy sources in conventional acquisition.

The increase in sources to three ('Triple Source') or five ('Penta Source') increases the data quality through an increased number of data points on the seabead which increases the resolution in the recorded picture.

This allowes for an increased streamer separation with a maintained data quility which significantly increases the efficiency of acquisition; an increased spread width means that more square kilometres are acquired per vessel pass.

This technique enables tailoring acquisition to provide improved data quality and/or improved acquisition efficiency depending on the client's specific project objectives.

XArray™ offers a number of consequential benefits for oil and gas companies:

A reduction in survey duration and cost by utilizing wide spreads without compromising data quality

Decreasing the number of deployed streamers in a wide spread thereby reducing capital costs for the seismic company, reducing operational risks, and reducing crew EHSQ exposure on the vessel back deck and in small boat operations for the purposes of in-sea maintenance requirements.

Polarcus currently offers two basic configurations of XArray™: Triple Source and Penta Source.

Triple Source: This configuration will, with a 12 x 150m streamer configuration, achieve the same data resolution and sail-line efficiency as a conventional dual source configuration utilizing an 18 x 100m streamer configuration. This reduces the operational exposure for Polarcus' crew and the environment whilst providing a highly cost effective and high quality data project solution for the Company's clients.

Penta Source: This offering extends the multi-source acquisition concepts to acquire very dense data resolution with conventional streamers and using a five source configuration. Penta Source enables a significant increase in data density and data quality providing data sampling to 6.25m. This type of acquisition is targeted at specific projects where complex structures in the near surface need to be resolved to allow accurate imaging of the underlying hydrocarbon deposits.

Since its introduction by Polarcus in 2014, the Company has successfully bid and utilized the XArray offering on third party projects as well as using the concept extensively on the Company's own multi-client programs.

In 2016, more than 30% of the contract revenue was generated using XArray™ and in 2017 Polarcus is seeing more clients requesting the technology in all operating regions.

7.3.2 RightFLOW™: advanced seismic solutions for reducing exploration costs

Polarcus' RightFLOW™ offering is the result of a data processing collaboration between Polarcus and the Company's data processing partner, DownUnder GeoSolutions Pty Ltd ("DUG"). RightFLOW™ refers to the 'Right' combination of acquisition parameters, survey deisgn and data processing flows both onboard the vessel and at data processing centres onshore.

Polarcus introduced RightFLOW™ to help oil companies reduce exploration cycle time and costs, and mitigate drilling risk. The offering employs an approach to seamlessly integrate and accelerate every step of the seismic data acquisition and processing workflow, from the initial survey design through to the delivery of final data and interpretation products, tailoring the workflow for any given geologic and geophysical environment. The result enables oil companies to make better informed decisions about potential well commitments earlier in the

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exploration cycle.

The offering can be structured in different ways to suit individual client requirements. For example, comprehensive onboard acquisition QC followed by full onshore processing; ultra-fast advanced onboard 3D processing followed by a more complex onshore processing sequence; or a combined offshore//onshore flow that passes an onboard processed intermediate dataset to a DUG onshore processing centre for more sophisticated multi-channel noise attenuation, velocity analysis, regularization, and time and/or depth imaging.

Polarcus regularly applies the RightFLOW™ offering to both third party projects and the Company's own multi-client programs.

A key development during 2016 was to re-brand Polarcus' onboard processing capability as "Priority Processing". The offering is enabled by DUG hardware and software being operated by Polarcus personnel delivering high-end interpretable products directly from the vessel. Such Priority Processing products involve a very advanced processed data volume delivered from the vessel on every project.

7.3.3 RightBAND™: broadband acquisition solutions to maximise signal-to-noise

RightBAND™ is Polarcus' geophysical proposition for broadband data acquisition and is aimed at optimizing data quality by maximizing signal-to-noise ratio at target geologic horizons by tuning the seismic source and receivers to the right frequency band. The result to the client is an optimized, de-ghosted (broadband) 3D image of the sub-surface.

For each survey design the source and receiver tow depths are chosen in conjunction with the client to optimize the expected bandwidth at the targets and to maximize signal-to-noise at the receiver ghost notch frequencies in preparation for pre-stack de-ghosting processing. Through careful consideration of complex geophysical modelling, data acquisition and data processing aspects, Polarcus ultimately delivers a service which includes:

Ultra-quiet data recording environment with X-BOW vessels and true 2Hz solid streamer cables (low noise environment with maximized frequency band)

Extended weather windows and enhanced low frequencies with deep towed streamers

High signal-to-noise data compatible with various leading broadband processing solutions on offer in the industry

Polarcus' RightBAND™ offering is widely recognized across the industry as an effective solution for broadband data acquisition and is now commonly utilized on third party projects and applied in all the Company's multi-client programs.

7.3.4 Remote and challenging operational ability

Polarcus has become known as an industry leader in delivering safe, operationally efficient and high data quality 3D seismic acquisition in some of the most remote and challenging locations around the globe. Such locations provide significant operational challenges including, extreme weather, sea-ice, icebergs, floating debris, piracy, remote logistics and significant environmental restrictions.

Successful 3D seismic campaigns have been completed in such locations as: Sakhalin-Russia, Greenland, Barents Sea, Falkland Islands, New Zealand, Australia, Myanmar and Nigeria. The success of such projects have relied on the competence of the Company's crew and suitability of vessels in addition to the sales and operations team working in close alignment with the client in order to ensure robust planning and risk mitigation.

7.3.5 Arctic and Environmentally Sensitive Sea Areas Offering

Polarcus has witnessed the increasing demand for greener credentials and has taken a leadership role within the industry with improved environmental performance (new builds,

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green passport features, operations management and environmental leadership). As new environmental legislation takes effect and the industry moves into more environmentally sensitive sea areas and frontier regions, the Company is very well positioned to deliver industry Arctic and environmental standards to clients.

The Company believes that in the long term, the Arctic region will generate a vast increase in seismic activity as the international oil and gas community seeks to explore the hydrocarbon potential of this largely unexplored frontier region.

Seismic operations in the Arctic are challenging due to the extreme environmental conditions and short operating season. Of paramount importance for any seismic operation will be safety, efficiency, data quality, and environmental protection. The Company has made important investments in the design of its seismic fleet that it believes will meet or exceed industry requirements in all these areas. All of the Company's vessels carry the CLEAN-DESIGN class notation that, coupled with the ULSTEIN X-BOW®, a double hull, the latest bilge water cleaning technology and an advanced ballast water management system, will offer the industry the safest and most environmentally responsible seismic acquisition services available today for the Arctic regions and Environmentally Sensitive Sea Areas.

Polarcus vessel's POLARCUS ASIMA, POLARCUS ALIMA and VYACHESLAV TIKHONOV are certified with the ICE-1A level and Polarcus is the only seismic Company with vessels with the ICE-1A* (super) level (POLARCUS AMANI and POLARCUS ADIRA). The ICE-1A and ICE-1A* class notations enable Polarcus vessels to enter the seismic survey areas earlier, and leave the areas later, than competitors' vessels thus extending the operating season. The new ice class notation, ICE-1A*, verifies that the vessel has sufficient strength, engine power and equipment to transit through areas with ice floes of 1.0 m level ice thickness, thereby providing a significant competitive advantage over lesser classed vessels. The high ice class characteristics of the fleet are of particular interest for clients planning programs in the Arctic Region. VYACHESLAV TIKHONOV is also capable of significantly higher transit speeds, of 18 knots, than most other seismic vessels, providing the opportunity for faster mobilization to remote prospects than comparable vessels.

In 2012 Polarcus received the world's first ever DNV Level 1 Triple E™ rating for its entire fleet. Triple E™ is a voluntary environmental rating scheme for ships with categories from Level 4 to level 1, where 1 is the highest. To achieve Level 1, all levels must be complied with and there are areas of specific focus across management, operation and vessel/equipment design. The rating is based on a verification of a ship's actual energy efficiency and environmental performance, carried out by an independent third party. This gives a transparent and detailed view of the company and vessel Environmental Energy Efficiency (EEE) performance and the management system and processes required to deliver such performance.

The Company believes that it can maintain a differentiated offering for the Arctic and the Environmentally Sensitive Sea Areas for an extended period due to the nature and quality of investments made in the Polarcus fleet and the requirement for much of this technology to be adopted in the vessel construction phase (there are significant limitations to what can be retro-fitted to competitors' vessels post construction).

7.3.6 Exploration 3D offering

Polarcus employs a number of spread enhancement and drag reduction technologies onboard the Company's vessels that enable vessels to tow ultra-wide seismic spreads comprising streamer separations of up to 200m as compared to the industry standard of 100m. This allows the Company to offer a highly competitive exploration 3D solution to the industry that has attracted significant industry interest in frontier markets as diverse as South America, Greenland, Myanmar, and Australia.

The exploration 3D offering also enables the Company to stay at the forefront of operational excellence and to lead the industry in various production records, such as an ultra-wide 3D marine seismic project being acquired in H1 2016 offshore Myanmar. In this project,

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POLARCUS AMANI towed an in-sea configuration that measures 1.8km wide across the front ends. With each of the ten streamers separated by 200m, the total area covered by the spread is 17.6 sq.km and delivers the oil company client a production rate of up to 190 sq.km per day. This configuration is also the largest in-sea configuration ever towed by a single seismic vessel as well as the largest man-made moving object on earth.

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8. BUSINESS

8.1 Incorporation, registered office and registration number

Polarcus Limited ("Polarcus" or the "Company") is an exempted company validly incorporated with limited liability in the Cayman Islands, registered with the Cayman Islands Registrar of Companies with registration number 201867 and regulated by the Companies Law. The Company was incorporated on 17 December 2007. The commercial name of the Company is Polarcus. The Polarcus Group was founded by Carl-Gustav Zickerman. The Company conducts its business according to applicable law and its Articles of Association. From 30 September 2009, the Company's Shares have been listed on Oslo Axess and later Oslo Børs with the ticker ("PLCS") following an initial public offering in September 2009.

Polarcus' registered office is c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman, Cayman Islands. The administrative headquarter of Polarcus is located at Almas Tower, Level 32, Jumeirah Lakes Towers, PO Box 283373, Dubai, U.A.E, telephone number: +971 4 43 60 800. The Company's website is www.polarcus.com.

8.2 Group history

The Polarcus Group dates back to the incorporation of Polarcus Limited on 17 December 2007. The Group consists of 25 entities as per the Group corporate chart in Section 8.9.1"Business—Organizational structure—Description of Group that the Company is part of". The entities are incorporated in various jurisdictions, including but not limited to Norway, Cayman Islands, United Arab Emirates, England, Brazil, Egypt, Cyprus, Nigeria, France, Singapore and United States of America.

In the early phase of the Company, eight high-end 3D seismic vessels were constructed incorporating the X-BOW vessel design from Ulstein Design AS. The vessels were delivered between 2009 and 2012.

On 30 September 2009, the Company's Shares were listed on Oslo Axess with ticker "PLCS" following an initial public offering in September 2009.

In August 2011, Polarcus signed a five year Bareboat Charter Party Agreement with a company within OAO Sovcomflot of Russia for POLARCUS SELMA, the Company's sixth seismic vessel. The vessel was renamed VYACHESLAV TIKHONOV by the charterers. The charterers exercised an option to extend the Bareboat Charter Party Agreement by an additional three years in February 2016.

In February 2013 Polarcus sold the 8-streamer 3D seismic vessel POLARCUS SAMUR to Turkish Petroleum. The agreement also included a 3-year service agreement relating to seismic data acquisition, management and crewing services for the vessel. The service agreement was extended by an additional two years in January 2016.

In June 2014 Polarcus entered into an agreement with DUG for the lease of hardware and software for the seismic data quality control on-board its vessels, enabling Polarcus to additionally offer a high-end on-board fast-track processing solution. Polarcus hires its own field personnel for the quality control and fast-track processing services. This arrangement has replaced the previous arrangement with GX Technology Corporation. The relationship with DUG enables a higher degree of control in timing and quality of on-board fast-track processing solutions with much more flexible and powerful on-board hardware capability. Importantly Polarcus now has full ownership of on-board fast-track revenue streams.

The rapid decline in oil prices and consequent cautious spending by oil companies has negatively impacted the Group's earnings since the second half of 2014. During Q4 2014, the Company addressed the increased liquidity risk caused by the weakening market situation by raising USD 35 million in new equity and implementing a cost management program, with the aim of reducing the 2015 cost base by USD 40 million (the "Cost Management Program").

http://www.polarcus.com/

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Subsequently, in early 2015, the Group adopted a '2015 Agenda' which consisted of plans to address the three key areas of revenue generation, cost reduction and debt management. In line with the 2015 Agenda, the Group implemented several measures during 2015 and subsequently which have enabled the Group to significantly reduce its cost base, to gain market share in a difficult market and optimize cash generation from operations.

The Cost Management Program included targeted savings in employment costs, operating costs, operating efficiency initiatives and supply chain streamlining. During 2015, the Group recognized savings of USD 39 million as a direct result of the Cost Management Program. In addition, the Group managed to reduce its fuel cost by USD 16 million in 2015 compared to the previous year, despite towing wider and larger spreads. During 2016 the Group recognized futher savings of USD 42 million, of which USD 40 million was a reduction in gross cost of sales and USD 2 million a reduction in general and administrative expenses. Of the reduced operating costs in 2016, USD 13 million was as a result of the cold stacking of POLARCUS NADIA in Q1 2015. Following the 2016 Restructuring, the leases of POLARCUS NADIA and POLARCUS NAILA were reclassified from a finance lease to an operating lease and an additional cost of USD 16 million was recorded with cost of sales in 2016 relating to the leases. During 2015 the Company regionalized its sales force from the UAE to its regional offices in Houston, London and Singapore to enable more efficient marketing, sales and support to the Company's customers.

In February 2015, Rod Starr assumed the role of Chief Executive Officer of Polarcus. He joined Polarcus from TGS-NOPEC Geophysical Company where he served as Senior Vice President Western Hemisphere.

In March 2015 the Company secured amended terms to the USD 410 million Fleet Bank Facility described in Section 9.8.2 "Operating and financial information—Summary of financing—USD 410 million Fleet Bank Facility". Furthermore, the Company received support from the majority of bondholders to amend certain terms to the 2.875% Convertible Bond Issue 2011/2016 described in Section 9.8.3 "Operating and financial information—Summary of financing—2.875% Convertible Bond issue 2011/2016".

On 25 March 2015, the Company took the decision to cold-stack one of its vessels, POLARCUS NADIA, as the Company could not be certain of securing sufficient backlog at acceptable rates for the whole fleet. Although the reduction in fleet size reduced the Group's revenue generating capacity, it also reduced its cost base both for operating costs and capital expenditure for the remaining fleet. As a result of the cold-stacking of POLARCUS NADIA for three quarters of the year, the Group achieved savings in operating costs of USD 29 million during 2015 compared to the previous year. In addition, savings of USD 10 million were recognized during 2015 as a result of redistributing certain marine and seismic equipment to other vessels in the fleet and, therefore, a reduced CAPEX spending. The reduction in cost in 2016, the first full year the vessel was cold stacked, was USD 13 million, compared to the prior year.

In order to improve its liquidity position, during Q3 2015 the Company sold its Multi-Client projects in Northwest Europe and West Africa to TGS for a consideration of USD 26 million and Polarcus retaining future revenue share on these projects' late sales. This transaction provided the Company with additional liquidity by monetizing a portion of the Multi-Client library.

The Company continues to focus on building a profitable multi-client library and the book value of the Company's multi-client library as of 31 December 2016 was USD 45 million.

Polarcus announced on 7 December 2015 its decision to halt all payments of interest and amortization to all of its finance providers. Prior to such decision, the Company had initiated discussions with its finance providers, being the banks, lease providers and certain bond holders, in order to address the Group's long term financing structure. Subsequently, on 6 January 2016, the Company announced a restructuring plan (the "2016 Restructuring"). On 22 January 2016, the Company's bondholders approved and, subsequently, on 27 January 2016, the Company's shareholders also approved the 2016 Restructuring. The 2016

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Restructuring was completed and implemented during February 2016 by finalizing the documentation with the relevant financing parties.

The 2016 Restructuring provided the Company with significantly reduced debt service of approximately USD 140 million over 2016 and 2017 and an improved balance sheet. The 2016 Restructuring resulted in an accounting gain of USD 178 million and an increase in share capital of USD 46 million in Q1 2016, largely as a result of a reduction in the carrying values of its debt liabilities, with the total increase to equity being USD 224 million.

During 2016, the Group recognized further savings compared to 2015 of USD 40 million resulting from the combined impacts of the continued Cost Management Pogram (USD 15 million) and reductions in project specific costs (USD 25 million) including fuel savings of less than USD 2 million.

Due to prolonged soft demand for global oil and gas exploration services throughout 2016, the Company was unable to maintain positive cash flow from operations. In Q4 2016, the Company commenced discussions with the lenders under the Fleet Bank Facility and on 9 February 2017 announced the launch of a private placement with the intent to raise new equity. The cash injection generated from this equity offering strengthened the Company's liquidity position in response to the prolonged industry downturn. The private placement leverages certain contingency planning that was incorporated in the 2016 Restructuring.

The amendments to the Fleet Bank Facility, following the 2016 Restructuring and 2017 Amendments have improved the liquidity position of the Company by USD 80 million through to the end of 2018 by a USD 30 million freeze of loan principal repayments, USD 15 million reduction in lease payments and an approximate USD 40 million equity raise. Additionally, the Working Capital Facility of USD 25 million has been extended by one year to 1 July 2019.

On 9 February 2017, the Company announced that one of its Norwegian subsidiaries had entered into a heads of agreement with SCF GEO AS ("Sovcomflot"), to charter a vessel on bareboat terms with delivery scheduled for March, 2017 for a fixed period of 5 ½ years (the "Charter"). The heads of agreement and the Charter are subject to the consent of the bank lenders who have mortgagee rights over the vessel. The Charter is also subject to finalizing terms with Sovcomflot.

On 17 March 2017, the Company gave notice that Duncan Eley, former Chief Operating Officer of Polarcus, had been appointed CEO, replacing Roderick Starr who had resigned from his position.

8.3 Overview of business activities

Polarcus is one of the five global marine three dimensional (3D) towed streamer geophysical service providers. The other providers are WesternGeco (Schlumberger), CGG, PGS and Shearwater. The seismic data acquired by the Company's vessels is used by oil and gas companies to evaluate hydrocarbon structures and to increase chances of commercial success ahead of the exponentially more expensive drilling phase. The data is also used to determine size and structure of known reservoirs in order to maximize field recovery and ongoing production rates. Polarcus has two principal business activities: (i) contract seismic services and (ii) multi-client projects. In addition, the Company charters a seismic vessel under a long term Bareboat agreement to Sovcomflot as described in Section 8.8.4 "—Material contracts—Bareboat charter of VYACHESLAV TIKHONOV " and provides management services related to the seismic operation of one vessel for Turkish Petroleum Corporation as described in Section 8.8.5 "—Material contracts—Seismic data acquisition agreement, and management and crewing agreement with Turkish Petroleum Corporation".

8.3.1 Contract seismic services

The Company's range of contract seismic services includes 3D, high-density 3D, 4D, multi-azimuth and wide azimuth data acquisition. Typical clients are independent, national and international oil and gas companies with offshore exposure.

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During 2015 and 2016, Polarcus introduced its XArray™ acquisition technique involving additional (X) sources to the traditional dual source. XArray™ is being marketed as "Triple Source" or "Penta Source" and provides a highly efficient acquisition methodology that requires less in-sea equipment and delivers a high-quality data product. During 2016, this technique gained substantial traction with clients and comprised more than 30% of the square kilometres acquired by Polarcus during the year.

Contracts for seismic surveys are entered into directly with the client. They are priced and negotiated on a project by project or spot market basis, in light of the prevailing market conditions and requirements of each individual project. A seismic survey is typically of one to six months duration, with potential for seasonal and multi-year contract terms in some cases, especially with national and international oil and gas companies.

An invitation to tender is issued by the relevant oil and gas company directly to the various potential service providers, typically two to six months before the expected commencement of a project. It is at the discretion of the relevant oil and gas company who it invites to tender. Direct award of contracts is uncommon and occasional. A project is typically awarded one to four months prior to its commencement. The Company participates in seismic tenders globally, with activity hotspots being driven by license round activity, operational seasons (weather), new discoveries, and other market conditions supportive of investment by oil and gas companies in exploration activity. The Company has established three regional offices worldwide to gather market intelligence, drive marketing campaigns, generate multi-client projects and coordinate and execute sales activity. The Houston office services the North and South America ("NASA") region, the London office services the Europe, Africa and Middle East ("EAME") region and the Singapore office services the Asia Pacific ("APAC") region. These regions generally have high levels of activity, making it possible to build backlog and viable campaigns within each region thereby minimizing inter-regional transits.

The Company places a high focus on the Arctic and Environmentally Sensitive Sea Areas ("ESSA") in its marketing strategy in order to generate value from the significant differentiations of the Polarcus vessels that specifically benefits operations in such areas. This includes the high ice class notations (ICE-1A and ICE-1A*), double hull construction, specialist de-icing equipment, ice radars, as well as the ballast water treatment systems, catalytic converters to reduce emissions to air, and highly efficient marine gas oil engines to minimise fuel consumption.

The Group's first major Arctic project was offshore western Greenland in 2012 where three Polarcus vessels were operating for two major oil companies over a three-month period. The project endorsed the value of the investments made by Polarcus into Arctic differentiation and the comprehensive set of Arctic-specific operational procedures developed to support such activities. These procedures have been accredited by DNV-GL, one of the world's leading ship and maritime classification society. Additional value benefits of the high ice class were demonstrated after successfully transiting the Northern Sea Route between Norway and the Pacific Ocean during summer 2013, a passage only available to vessels with ICE-1A or higher.

The Group has subsequently undertaken successful Arctic contract and multi-client seismic operations in the Barents Sea, offshore both northern Norway and Russian Barents Sea. In Q2/Q3, 2015 the Company acquired a high-profile large and complex multi-vessel operation in the Arctic waters offshore Sakhalin for a super-major oil company. The project was delivered ahead of the client's plan and budget with outstanding safety, environmental and operational performance.

Polarcus has built up a similar extensive operational experience in non-Arctic Environmentally Sensitive Sea Areas. One recent example was during 2015 when the Company successfully acquired an extended campaign of proprietary and Multi-Client projects in Australia totalling more than 16 vessel months. This was further endorsement of Polarcus' environmentally focused investments in that the environmental permits for the projects were able to be secured in a timely manner in what has otherwise been a highly monitored and somewhat restrictive period for exploration activities in Australia. Due to the environmental technology

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invested in the vessels and the fact that the vessels are uniform across the fleet, three different Polarcus vessels were interchanged to deliver this campaign. Such uniformity and flexibility gives clients comfort and assures the environmental regulator that delivery of environmentally compliant operations is embedded across the Company and its vessels. This flexibility also enables the Company to interchange vessels in order to optimize fleet positioning and utilization and to meet client timing requirements.

The Company continues to pursue similar projects to leverage its Arctic and environmental differentiation. The extensive track record that Polarcus has compiled positions the Company well to secure such projects going forward.

In a relatively short period of time the Company has established itself as a true global operator of high-end 3D marine seismic services with an extensive track record of operational excellence in all four corners of the globe including the following key markets:

North West Europe (UK, Norway, Ireland, Denmark)

West Africa (Senegal, Guinea Bissau, Ghana, Nigeria, Cameroon, Equatorial Guinea, Namibia, South Africa, Morocco)

East Africa (Kenya, Mozambique)

Asia Pacific (India, Myanmar, Malaysia, Indonesia, Australia, New Zealand)

North America (Gulf of Mexico)

South America (Suriname, Guyana, Brazil, Colombia, Uruguay, Falkland Islands)

The Company has implemented an in-house processing capability through its well-established agreement with DownUnder GeoSolutions ("DUG") under which Polarcus leases hardware and software for the seismic data quality control on-board its vessels and which also enable Polarcus to offer a high quality fast-track processing solution on-board all Polarcus vessels. Polarcus has marketed this high-end offshore processing capability "Priority Processing" in order to reflect the high quality and rapid turn around of deghosted, pre-stack time migrated data volumes upon which oil companies can make planning and operational decisions.

DUG furthermore provides onshore advanced seismic data processing services at DUG's globally located data processing centres as and when such services are part of the scope of surveys awarded to or required by the Company.

A key element of Polarcus delivering its XArray™ technique is DUG's ability to de-blend data. DUG is a leading provider of de-blending technology.

The combination of Polarcus and DUG to deliver seismic acquisition, on-board fast track processing and advanced onshore processing has established a strong reputation across a broad Client base. The XArray™ and RightFLOW™ offerings (see Section 7.3 — Industry and market - Positioning of Polarcus in the market") "rely on the combination of the acquisition and data processing competences of Polarcus and its strategic partner DUG".

8.3.2 Multi-client projects

Multi-client projects are surveys undertaken by seismic companies where the deliverables comprise a suite of fully imaged seismic data that are subsequently licensed to oil and gas companies on a non-exclusive basis. The seismic company develops the seismic opportunity in much the same way as an exploration company and then seeks industry underwriting from oil and gas companies to reduce the upfront project commercial risks. Subsequent multiple sales of data licenses over a period of time, typically 5 to 10 years, are expected to deliver returns in excess of contract seismic service rates. Such license sales arise both from first time sales to new clients, and from uplift fees contractually committed from existing licensees on trigger events such as formation of bidding groups for purposes of bidding for acreage, acreage awards, joint operating agreements, farm-ins, commencement of drilling operations,

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and M&A activity where an acquiring entity does not already possess a valid data license. Ownership of, or exclusive marketing rights to, the multi-client project deliverables remains with the seismic company and project risks are offset through meticulous business case planning supported by pre-funding commitments from participating oil and gas companies in advance of project execution.

Under this model, oil and gas companies benefit from access to high quality data at less than the cost of acquiring the same data on contracted seismic service rates, but forfeit their exclusivity of access to the data. In the majority of cases such data is acquired over open acreage, or acreage due for full or partial relinquishment, in anticipation of future licensing by relevant authorities. The project deliverables are used by oil and gas companies for risk evaluation and prospect identification prior to their making a bid for acreage or prior to making a field development plan.

The Company applies a professional project management approach to the planning and delivery of multi-client projects, with each project being supported by a sound business case for success and with quality control of the deliverables in accordance with industry accepted practices. Multi-Client projects can be either identified by a prospective client that brings the project details to the seismic companies in a similar manner to an invitation to tender for a proprietary contract, or it may be developed by the Company's Multi-Client team who identify a business case for approaching potential clients who may be interested in pre-funding such a project.

As part of the agreement with DownUnder GeoSolutions ("DUG") entered into in June 2014, DUG has the opportunity to participate in all Polarcus multi-client projects through providing its data processing services as a cost contribution to the project which secures DUG a corresponding revenue contribution from the project. The cost and revenue proportion taken by DUG on such multi-client projects is typically in the order of 10%.

In October 2016, Polarcus announced a multi-client collaboration with TGS-NOPEC Geophysical Company ("TGS"). TGS is a global multi-client company and the collaboration leverages the core strengths and expertise of TGS and the Company. The collaboration agreement enables Polarcus vessels to be used for the acquisition of 3D marine seismic projects in a structure where TGS may provide substantial funding of multi-client projects and, depending on the respective level of funding between the parties, a revenue share mechanism is put in place for late pre-funding and late sales related to the multi-client projects. The collaboration is intended to drive utilization of Polarcus vessels as well as to allow Polarcus to expand its multi-client business with limited capital investment. See Section 8.8.8 for further detail.

Polarcus has furthermore entered into several service agreements under which various consultants assist Polarcus in identifying multi-client projects in the different regions.

In June 2015 Polarcus divested its multi-client projects in Northwest Europe and West Africa in order to improve its liquidity position.

As of 31 December 2016 the Company had a multi-client library with a book value of USD 45 million. The Company's data library comprises multi-client surveys offshore Australia, West Africa and Brazil. The carrying value of the Brazilian multi-client library is nil as it has been fully amortized.

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Figure 5: Book value of Multi-Client library as of 31 December 2016

8.3.3 Vessel backlog

The Company is dependent on obtaining contracts for seismic services and for making license sales of its multi-client data to third-parties. These risk factors are further described in Section 2.2.5 "Risk factors—Risk factors related to the Company—Contractual and counter-party exposure", and Section 2.2.6 "Risk factors—Risk factors related to the Company—Multi-client investments".

As of 21 February 2017 the Company had an order backlog of USD 230 million, calculated at the start of Q1, 2017. The booked capacity for its active fleet of six vessels for the coming quarters is given below. POLARCUS NADIA has been cold-stacked since 01 April 2015 and is therefore excluded from the booked capacity.

Q1 2017 Q2 2017 Q3 2017 Q4 2017 85% 85% 80% 45%

VYACHESLAV TIKHONOV is presently on a bare boat charter agreement with a subsidiary of OAO Sovcomflot of Russia until August 2019, and is included in the above numbers. The fixed 5 1/2 years charter for POLARCUS AMANI to a subsidiary of OAO Sovcomflot of Russia is also included in the above numbers. Delivery is scheduled for March 2017 (See Section 8.8.4 and 8.8.9).

8.4 Data acquisition methods

Modern marine seismic data is collected by emitting acoustic energy below the water's surface from energy sources towed behind a survey vessel (see Figure 2). The energy source is typically formed by using high pressure air that is emitted through an array of energy source elements. At rock layer boundaries beneath the seabed some of this acoustic energy is reflected back up to the seismic streamers, also towed behind the survey vessel. These streamers can be up to 12,000m long and they have hydrophones within them that detect and convert this reflected energy into digital data, which in turn are recorded on-board the survey vessel. These data are processed both on-board and onshore and subsequently

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interpreted to provide a 3D image of the earth beneath the sea-bottom of the survey area. Geoscientists then analyse these images to identify potential hydrocarbon reservoirs.

Figure 6: Principle of towed marine seismic acquisition

Several seismic techniques are in use today to provide such information to the geoscientists. At the highest level these can be categorized into 2-, 3- and 4-dimensional seismic surveys. The 2-dimensional (2D) seismic surveys represent the most basic and least costly method, being conducted by a survey vessel towing a single streamer and one energy source. Such surveys will generate data which comprise individual cross-sections of the earth along the lines tracked by the vessel which can be kilometres apart, and is often used for large basin-wide analyses of frontier geologic regions. However, these 2D surveys cannot accurately define prospective hydrocarbon traps or the structural geometry of prospective oilfields.

3D seismic is a more sophisticated technique that involves towing multiple streamers behind the survey vessel to produce, in effect, several parallel 2D cross-sections of data in each single traverse of the vessel (see Figure 7). When the area is covered with a number of traverses of this type, the data is processed to produce a 3-dimensional (3D) cube of the subsurface. Further improvements in data quality can be achieved by reducing the lateral spacing between the streamers, termed High Density 3D (or "HD3D"); by acquiring the area in different directions to provide illumination of the target zone from a number of different perspectives, termed Multi-azimuth (or "MAZ"); or by laterally offsetting the source from the line of traverse to improve target illumination at depth and beneath sub-surface structures such as salt or basalt, termed Wide-azimuth (or "WAZ"). These advanced techniques are more complex and more costly as they require additional streamer capacity and in the case of Wide-azimuth, additional vessels to tow the energy sources parallel to the primary survey vessel (see Figure 7). Compared to traditional 3D seismic, High Density 3D seismic can quadruple the streamer requirements, Wide-azimuth surveys are often acquired with 2 vessels carrying streamers and sources as well as two additional vessels carrying sources only. In the case of Multi-azimuth, the same area can be acquired up to six times in different directions. However, the benefits of improved image quality and therefore better understanding of the reservoir are increasingly recognized to outweigh the higher costs.

A market has also developed for a cost effective 3D exploration technique that is proving of high interest to oil and gas companies seeking to explore large frontier license blocks, often in deep water. Such acreage typically requires the licensee to undertake an initial exploration study prior to a more thorough appraisal or partial relinquishment, or to support an equity participation plan (farm-in/farm-out agreement). This technique requires expanding the lateral separation between streamers, commonly known as wide tow 3D acquisition, in order to provide much greater areal coverage without causing a significant loss of resolution in the

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imaging. New developments in drag reduction and in-sea equipment technology have allowed the Company to compete successfully in this growing market segment, with the Company's vessels capable of towing ultra-wide spreads of 10 streamers with separations of up to 200m between parallel streamers.

Figure 7: Plan views of four major types of 3D seismic acquisition that Polarcus is expected to employ

In 4-dimensional (4D) seismic programs, the 4th dimension is elapsed time, meaning that the same 3D survey may be reacquired over periods of typically one to three years. This method is used to observe the physical changes occurring in a reservoir as a result of hydrocarbon production, or injection of water or gas into the reservoir, by analysing the differences between models acquired over a number of years. Time-lapse or 4D seismic compares the results of 3D seismic surveys repeated over significant time intervals (e.g. before a field starts producing versus various post-production stages) over the same geographic area. The picture below shows an example of a seismic 3D operation where the total lateral spread exceeds 1,350 meters, and the length of the seismic streamers is typically 8,100 meters but can be as much as 12,000 meters.

Figure 8: An aerial view of a 3D operation demonstrating size of the "spread"

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8.5 Vision and strategy

8.5.1 Vision

The Company's vision is "to be a pioneer in an industry where the frontiers of seismic exploration are responsibly expanded without harm to our world".

8.5.2 2020 Company Strategy

The Company's 2020 Strategy is to responsibly provide the RIGHT marine geophysical services and seismic data from Pole to Pole, through innovation and excellence to succeed in any market condition, and capture additional value by re-shaping the industry to improve explorational success.

What we do:

Acquire Marine Seismic Data

Own & Process Seismic Data

Add Value from Assets & Capabilities

8.5.3 Balanced Scorecard and Company Improvement Plan

To deliver the 2020 Company Strategy there are two central management tools used to measure company performance against the 2020 Company Strategy with reference to the Company Vision.

A Balanced Scorecard is used to measure its performance against a set of defined annual goals. The Balanced Scorecard includes the following four categories to measure company performance:

Financial (eg. revenue, profitability, cash generation)

Business processes (eg. asset utilization, fleet backlog secured, effective implementation of safety and management system)

External environment (eg. client satisfaction, competitor activity)

Innovation and Growth (eg. new revenue streams, new technologies, organizational development)

The annual Company Initiatives are aligned with the Balanced Scorecard categories and defines a number of company-wide initiatives that underpin the continuous improvement of the organization.

The following are examples of annual Company Initiatives:

Financial (eg. global tax structures, working capital initiatives)

Business processes (eg. departmental quality optimization)

External environment (eg. optimizing partner and supplier relationships)

Innovation and Growth (eg. capturing innovation, intra-organization communication)

8.5.4 Core values

In support of the above vision and strategy, the Company has identified a set of 'core values' which define the Company's ethos and the way Polarcus' management, employees and contractors are expected to perform within the business.

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Responsibility Innovation Excellence

Environmental Health & Safety Ethical Financial

RIGHT Solutions Marine acquisition Data processing Service offering

Human capital Geoscience Operational Commercial

8.6 Organization and business lines

8.6.1 Organization

Polarcus is organized in three geographical business units with client-facing regional offices in the US, UK and Singapore, to cover global markets across North & South America (NASA), Europe Africa & Middle East (EAME), and Australia & Pacific (APAC). The Company has secured experienced sales and marketing teams with extensive networks and in-depth knowledge of the various regional markets. Each regional office delivers contract-sales and multi-client revenue streams and comprises operational and technical marketing capabilities.

These client-facing regional teams are supported by a centralized business and operational support organization located at the Group's headquarters in Dubai, U.A.E. The operational support structure consists of Marine Acquisition (including supply chain, operational and technical support to the global fleet of vessels) and Geophysical Services (geophysical support for the vessels and regional offices). The business support organization comprises of centralized EHSQ (Environment, Health, Safety, Quality), human resources, finance, legal, marketing and IT support functions.

The Group additionally has a network of satellite marketing offices, with footprints in Russia, Norway, Brazil and Nigeria. The Group has also entered into marketing agreements with local representatives in many of the jurisdictions worldwide where such local representation is required in order to enable the Group to participate in the tendering process for surveys. Polarcus is pre-qualified to participate in tenders for the vast majority of oil and gas companies in the offshore exploration and production environment.

Unlike many other seismic companies, Polarcus directly employs maritime crew in addition to the marine seismic crew and office based personnel. This ensures that all employees operate under one unified EHSQ (Environment, Health, Safety, Quality) management system, which continues to be an organizational structure that enables Polarcus to demonstrate leadership in safe, clean and efficient 3D marine seismic data acquisition.

The Group, including its seismic vessels, was certified in September 2010 under ISO 9001, ISO 14001 and OHSAS 18001, becoming the first seismic player in the industry to achieve such company-wide accreditation both onshore and offshore. This certification is maintained by the Company according to accreditation requirements.

Historically, the staffing of the Group has relied largely on securing expert management and employees from across the seismic industry. Since 2011, the Company has run a field crew trainee recruitment, training and development program. By selecting, recruiting and training junior field crew, the Company is better able to secure its future workforce and reduce the reliance existing human capital in the industry.

The following organizational charts describe the top level organization and the business unit structure as they are currently filled within the Company:

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Polarcus Management Team

Polarcus Business Unit Management

As at 31 December 2016, the Group had 435 employees.

8.6.2 Business lines – key transfer pricing policies

Polarcus has the following service providing companies within the Polarcus Group; (i) Polarcus

Chief Executive Officer

Duncan Eley

Chief Financial Officer

Hans-Peter Burlid

General Counsel

Caleb Raywood

SVP People & Business Services

Tamzin Steel

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DMCC which is the main administration company and employs most of the administrative personnel including the senior management, (ii) Polarcus UK Limited, Polarcus US Inc., Polarcus Asia Pacific Pte. Ltd. and Polarcus Norway AS that employ business development and marketing personnel, and (iii) Polarcus Limited and Polarcus Multi-Client (CY) Ltd that employs the maritime and seismic crew for all vessels within the Polarcus Group.

For the sales support services that Polarcus UK Limited, Polarcus US Inc. and Polarcus Asia Pacific Pte. Ltd. render, they generally receive a commission of 5% based on the total value of each seismic survey contract. The commission rate is in line with what the Group pays to its unrelated agents in the various regions.

Polarcus DMCC provides three different services: (i) multi-client sales and support services, (ii) EHSQ, technical and operational services, and (iii) administrative management services to the various companies within the Polarcus Group.

For the EHSQ, technical and operational services as well as the administrative management services, the pricing method applied is a fixed service fee. The service fee is calculated by summing the total cost base and adding a mark-up, depending on contemporaneous market conditions.

For providing multi-client sales services Polarcus DMCC generally receives a commission of 5% based on the total sales value. Polarcus Limited and Polarcus Multi-Client (CY) Ltd., in their capacity as crew providers, supply competent crew to the vessels. The total cost of the crew services including a mark-up on the administrative costs are allocated equally between the vessels. Furthermore, Polarcus in its capacity as streamer pool operator, leases out streamers and certain connected in-sea equipment to the various vessel owning entities. The lease fee is calculated by summing the total cost base and adding a mark-up of 10%, depending on market conditions. The Group companies are invoiced monthly in arrears. In February 2017, Polarcus Limited sold certain streamer sections to the companies which own Polarcus vessels and on which those streamers were carried at fair market value on arm's length terms. This will result in Polarcus receiving significantly less revenue from the lease of streamers.

The Company believes that its transfer pricing policies and documentation are in line with international practice.

8.7 The Polarcus fleet

The Polarcus fleet currently comprises seven ultra-modern seismic research vessels built to the ULSTEIN SX124, SX133 and SX134 designs. The vessels are ultra-modern and innovative seismic research vessels that have been designed for the most challenging offshore projects and operating conditions and carry class notations from the classification society, Det Norske Veritas (DNV) of Norway. The vessels combine the latest developments in maritime technology with highly advanced seismic systems.

The first Polarcus vessels were built in Dubai, UAE, by Drydocks World Dubai LLC ("DWD") and the last two vessels in Norway by Ulstein Verft AS. All vessels are high-end 3D seismic vessels where four of the vessels have 12 streamer capability and are capable of transits at 14 to 15 knots, two vessels have up to 14 streamer capability and are capable of transits at 15 knots, and one vessel has the capability of towing up to 8 streamer in wide-tow configuration comprising 200 metres lateral separation between streamers. This last vessel is also capable of transit speed of up to 18 knots making her especially suited for fast and safe transits to/from remote survey areas in the Arctic thereby maximizing time on a prospect. Her speed also allows efficient transits in markets such as Australia where there are often long distances between prospects.

The Company originally had a fleet of eight vessels, one of which, POLARCUS SAMUR, was sold in 2013. Of the seven remaingin vessels, one vessel, POLARCUS NADIA has been cold-stacked since 01 April 2015. The Company currently has no immediate plans to increase or decrease its fleet size, nor change the number of its vessels that are cold-stacked.

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8.7.1 Design features

All the vessels feature the latest innovative inverted bow design, the ULSTEIN X-BOW® hull. This has several benefits over traditional hull designs such as:

Improved transit performance in marginal or bad weather, giving the Company the option of either higher transit speeds or reduced fuel consumption according to operational requirements

Lower pitch and heave acceleration

No bow slamming

Reduced noise and vibration levels

Less spray, especially important in Arctic operations

Negligible occurrence of green water on bridge deck

Other important features are increased systems redundancy, crew comfort, environmental impact mitigation and superior performance. The ULSTEIN SX124 vessels hold a DNV ICE-1C class notation while the ULSTEIN SX133 and SX134 vessels also hold a DNV ICE-1A class notation (the two latest vessels an ICE-1A* class notation) that will enable safe access and an extended operations season in the Arctic Ocean.

The class notation ICE-1C verifies that the vessels have sufficient strength, engine power and equipment to transit through areas with ice floes of 0.4 m level ice thickness while the class notation ICE-1A verifies that the vessels are capable of transiting through areas with ice floes of 0.8 m level ice thickness. The new super-high ice class notation, ICE-1A*, verifies that the vessels have sufficient strength, engine power and equipment to transit through areas with ice floes of 1.0 m level ice thickness.

The vessels are amongst the most environmentally sound seismic vessels in the market, designed with exhaust catalysts for all main engine exhaust lines in order to reduce the emissions of NOx, HC (hydrocarbons), soot and sound. These designs supersede any international requirements currently in force and are in accordance with DNV's latest rules for CLEAN-DESIGN class. There are for instance no fuel tanks adjacent to the vessels external hull, which mitigates the potential for exposure of fuel to the environment, and the adopted bilge water cleaning system will reduce contaminants to less than 5 ppm in contrast to typical maritime shipping levels of 15 ppm or greater.

Polarcus believes that the expansion of the industry into new frontiers and environmentally sensitive regions of the world will require a much greater level of environmental compliance as new and projected legislation on emissions to air and water come into effect. Taxes on NOx emissions for instance have already been introduced in Norway and are expected to be implemented in other parts of the world in due course. The Company believes and has already seen that this has become a significant service differentiator for Polarcus. In order to secure this differentiator, the Company has placed a strong emphasis from its inception on "green" investments, both for its seismic systems and its maritime technologies. The Company has an emission accreditation certificate from DNV that verifies that it operates with a dramatically reduced environmental footprint compared to its peers.

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POLARCUS ASIMA POLARCUS ALIMA Type: Design: Length: (loa): Beam: Streamer capacity: Speed Ice class: Year delivered:

3D vessel ULSTEIN SX134 92.0m 21.0m 12 15.0 knots ICE-1A 2010

Type: Design: Length: (loa) Beam: Streamer capacity: Speed Ice class: Year delivered:



3D Vessel ULSTEIN SX124 88.8m 19.0m 12 14.0 knots ICE-C 2009


3D Vessel ULSTEIN SX124 90.8m 19.0m 14 14.0 knots ICE-C 2010

POLARCUS NAILA POLARCUS NADIA

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Figure 11: Polarcus fleet comprising three vessel designs.

8.7.2 Polarcus' seismic streamers

As oil and gas exploration activities are conducted in areas with deeper, more complex geology, the demand for longer streamers is increasing although exact requirements may vary significantly from project to project. Streamer sections are owned by Polarcus Limited and the owners of the Group's vessels, but will be transferred to Polarcus Shipholding AS prior to 31 March 2017. Streamer sections are fungible and can be leased between vessel-owning companies as current project operations require. At the date of this Prospectus, all Polarcus operated vessels (except POLARCUS NADIA) are equipped with a complete set of streamers and some spare parts. In addition, the Group has a full streamer set available following the cold-stacking of POLARCUS NADIA and will have an additional, full streamer set available on delivery of POLARCUS AMANI into the contemplated bareboat charter party described in Section 8.8.9.

VYACHESLAV TIKHONOV Type: Design: Length: (loa) Beam: Streamer capacity: Speed: Ice class: Year delivered:


POLARCUS AMANI POLARCUS ADIRA Type: Design: Length: (loa) Beam: Streamer capacity: peed Ice class: Year delivered:

3D vessel ULSTEIN SX134 92.0m 21.0m 14 15.0 knots ICE-1A* 2012


3D vessel ULSTEIN SX134 92.0m 21.0m 14 15.0 knots ICE-1A* 2012

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8.7.3 POLARCUS NADIA & POLARCUS NAILA

Delivered in December 2009 and February 2010 respectively, POLARCUS NADIA and POLARCUS NAILA are 3D seismic vessels built to the ULSTEIN SX124 design.

POLARCUS NADIA is capable of towing up to 12 streamer cables with a lateral separation of up to 75 meters, or 10 streamer cables with a lateral separation of 100 meters. The vessel was cold-stacked in April 2015.

Built in 2010, POLARCUS NAILA was converted in 2014 and is now capable of towing up to 14 streamer cables with a lateral separation of up to 150 meters, or 10 streamer cables with a lateral separation of 200 meters.

POLARCUS NADIA and POLARCUS NAILA have an overall length of 88.8 meters and 90.8 meters respectively, a draft of 6.6 meters and a maximum speed of 15 knots. Both vessels carry the ICE-C class notation enabling them to operate in light ice conditions. The vessels are amongst the most environmentally sound seismic vessels in the market with diesel-electric propulsion, high specification catalytic convertors, a double hull and advanced bilge water cleaning systems.

POLARCUS NADIA and POLARCUS NAILA are leased by Polarcus.

8.7.4 POLARCUS ASIMA & POLARCUS ALIMA

Delivered in August 2010 and March 2011 respectively, POLARCUS ASIMA and POLARCUS ALIMA are both Arctic-ready 3D seismic vessels built to the ULSTEIN SX134 design and capable of towing up to 12 streamer cables with a lateral separation of 100 meters. POLARCUS ASIMA and POLARCUS ALIMA have an overall length of 92 meters, a draft of 7.5 meters and a maximum speed of 15 knots, and carry the high ice class notation, ICE-1A, enabling them to operate with the utmost safety in the Arctic Ocean. The vessels are also amongst the most environmentally sound seismic vessels in the market with diesel-electric propulsion, high specification catalytic convertors, a double hull and advanced ballast water treatment//bilge water cleaning systems.

POLARCUS ASIMA & POLARCUS ALIMA are owned by Polarcus Asima AS and Polarcus Alima AS respectively.

8.7.5 POLARCUS SELMA (VYACHESLAV TIKHONOV)

POLARCUS SELMA (named VYACHESLAV TIKHONOV under bareboat charter) was delivered in August 2011 and was handed over to the Sovcomflot group in a 5-year bareboat charter agreement which in January 2016 was extended by an additional three years. This is described in Section 8.8.4 "—Material contracts—Bareboat charter of VYACHESLAV TIKHONOV". VYACHESLAV TIKHONOV is of the ULSTEIN SX133 design with the high ice class notation, ICE-1A, enabling her to operate safely and effectively in the Arctic. The 84 meter long vessel with maximum speed of 18 knots, is purpose built for the high-end 3D marine seismic market and is capable of towing up to 8 streamers in a conventional spread, or 6 streamers in a First PassTM wide tow configuration comprising 200 meters between streamers. The vessel is again amongst the most environmentally sound seismic vessels in the market with diesel-electric propulsion, high specification catalytic convertors, a double hull and advanced ballast water treatment//bilge water cleaning systems.

POLARCUS SELMA is owned by Polarcus Selma Ltd.

8.7.6 POLARCUS AMANI & POLARCUS ADIRA

POLARCUS AMANI was delivered in March 2012 and POLARCUS ADIRA in June 2012.

The vessels are of the same proven design as POLARCUS ASIMA and POLARCUS ALIMA, but incorporate additional advanced capabilities, including the ability to tow up to 14 streamers. Moreover, the propulsion plant is upgraded from 2 x 3700 kW to 2 x 4400 kW. POLARCUS

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AMANI and POLARCUS ADIRA have an overall length of 92 meters, a draft of 7.5 meters and a maximum speed of 15 knots. They carry the super high ice class notation, ICE-1A* enabling them to operate with the utmost safety in the Arctic Ocean. The vessels are equipped with three additional lead-in winches that enable the vessels to tow up to 14 streamers and provide more capacity for spare streamers.

POLARCUS AMANI & POLARCUS ADIRA are owned by Polarcus Amani AS and Polarcus Adira AS respectively.

On 9 February 2017, Polarcus announced that a heads of agreement had been signed with Sovcomflot to charter a vessel on bareboat terms with delivery scheduled for March, 2017 (the "Charter"). It is intended that the vessel will be POLARCUS AMANI. (See Section 8.8.9 – "Business - Material Contracts - Heads of Agreement for 5 ½ year bareboat charter").

8.7.7 Encumbrances related to the vessels

The major encumbrances related to the vessels owned by the Polarcus Group are summarised below.

Vessel 1st lien or lease

VYACHESLAV TIKHONOV USD 125m Convertible Bond as described in Section 9.8.3

The fleet consisting of: POLARCUS ASIMA, POLARCUS ALIMA POLARCUS AMANI POLARCUS ADIRA

USD 410m Fleet Bank Facility as described in Section 9.8.2

8.8 Material contracts

This section summarises the contracts which are material to the Company. Breaches or cancellations related to these contracts will have a material adverse effect on the Company. However, the Company's business is not dependent on one single contract.

The Company is dependent on obtaining contracts for seismic services and for the multi-client data being licensed to third-parties. These risk factors are further described in Section 2.2.5 "Risk factors—Risk factors related to the Company—Contractual and counter-party exposure", and Section 2.2.6 "Risk factors—Risk factors related to the Company—Multi-client investments".

8.8.1 Seismic acquisition contracts

Most seismic acquisition contracts are awarded through a tendering process. The contract signed between Polarcus (as contractor) and an oil company (as client) is generally based on the client's standard terms and conditions with exceptions negotiated by Polarcus to align the contract terms as much as possible to terms that reflect Polarcus' acceptable allocation of contractual risk. Contract terms will vary depending on the client's identity, size, nationality, and on the location of the work. In certain jurisdictions, exceptions to contract terms are not accepted at all.

The contracts will always contain provisions setting out the commercial and practical aspects of the work, such as scope of work, rates and prices (rates will either be turn-key or day/km rate with mobilization fee, demobilization fee, standby rate), insurance policies, EHSQ standards, technical specifications, details of contractor's equipment, software and personnel.

Furthermore, the main terms of a legal character found in industry standard seismic acquisition contracts can be summarized as follows:

Terms of payment: payment of fees is normally on monthly basis, usually within 30 days of receipt of invoice; sometimes with a provision for interest in the event of late

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payment. However, national oil companies sometimes insist on paying only after completion of the full survey.

Financial guarantees: In certain situations the contracts are subject to the provision of a bid bond (at the tendering stage), parent company guarantee (at the tendering stage or after an award) and/or a performance bank guarantee (after an award). The amount of such guarantees varies from project to project.

Taxes: Tax provisions and liabilities will vary depending on the jurisdiction where the survey is performed and on the contracting entities used by both parties. However, taxes are usually for the contractor's account, including customs and excise duties.

Ownership of seismic data: Typically, the data belongs to the client from creation, subject to payment by the client of all sums due to the contractor under the contract. The client will usually also request ownership of inventions/know-how created by the contractor during the survey (if any).

Warranties and disclaimers: Contractor's warranties in the contract are normally limited and warranties of merchantability or fitness for a particular purpose with respect to any work, technical information, data, products or reports are excluded. Clients normally recognize that the contractor cannot warrant the accuracy or completeness of any interpretations, recommendations or reservoir descriptions or other models developed based on the data provided by the contractor, nor for any subsequent operations carried out by the client reliant on such data.

Liquidated damages: In some instances the client imposes payment of liquidated damages for delay, either in commencing or completing the work. Polarcus always requests a waiver of this requirement; however, this requirement is sometimes imposed on all contractors without scope for negotiation.

Remedy for defective/lost/damaged data: Normally the client will have the right to require the contractor to either reacquire data which are defective/lost/damaged (at a time to be decided by the client, or mutually agreed), or to reimburse the client for the amounts originally charged for the defective/lost/damaged data. Under some contracts the client will even require the contractor to pay for all or part of the cost of the client having to hire another seismic contractor to re-perform the survey (or part thereof). However, Polarcus will always seek to limit its liability in respect of such third party costs. In most instances of defective/lost/damaged data, the contractor will be able to fulfil its rectification obligation by correcting the data tapes through further processing or reprocessing, or providing identical copies of the tapes.

Liabilities: Most contracts implement the "knock for knock" principle where each party is responsible for damage and losses to their own property and personnel, regardless of cause (although sometimes the principle is slightly eroded by the "gross negligence/wilful misconduct of the other party" exception). With respect to third party liability, each party is responsible for third party losses to the extent that they have caused them. For certain third party liabilities, however, the client will be responsible, such as pollution other than from the contractor's vessel and property, damages inherent to the work suffered by third parties, such as fishermen and fishing plants. Contractors will often also request (but not always obtain) the client to be solely responsible for any damage arising from/in connection with offshore installations/rigs (including pollution) and submerged property. It is worth noting that an increasing number of companies refuse to accept the "knock for knock" principle, and tend instead to push more liability onto the contractor. Seismic contracts normally also include provisions excluding consequential losses. Certain clients accept a limitation of contractor's liability to 100-150% of the total contract price.

Force majeure: The contractor will be exempted from performing its obligations under the contract in the event of the occurrence of force majeure; but will be compensated at (or an agreed percentage of) the standby rate (typically a somewhat reduced production

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rate still covering the operational cost of the vessel) during such occurrence. The client (and sometimes the contractor as well) has the right to terminate the contract if the force majeure lasts for more than a certain number of days. The client may also allow the contractor to demobilize and carry on with other work, and later return to the area to finalize the survey.

Termination: The client can terminate the contract for breach of the contractor's obligations under the contract (such as failure to start the seismic survey on time; breach of main contractual obligations; insolvency; breach of business ethics provisions; breach of confidentiality obligations). In most contracts the client also has the right to terminate the contract for convenience (without cause), subject to payment of a reasonable termination fee designed to cover the contractor's cost or losses. In some contracts, the contractor is also granted a right to terminate in the event of the client company's default (such as delayed payments of amounts due or insolvency).

Governing law and dispute resolution: The governing law of the contract will depend principally on the client's identity and on the location of the survey. English, Norwegian, Dutch and French law are frequently used; but in certain jurisdictions (e.g. in Asia, Africa and South America), the contract may be governed by local law with little possibility for negotiation. Disputes are either referred to international arbitration or to appropriate local courts.

Business ethics: The contractor is invariably obliged to comply with anti-corruption legislation, including the US Foreign Corrupt Practices Act and the UK Bribery Act 2010.

8.8.2 Multi-Client licenses

Multi-client licenses cover surveys undertaken by seismic companies where the project deliverables, comprising a suite of fully imaged seismic data, are subsequently licensed to oil and gas companies on a non-exclusive basis. Ownership of or exclusive marketing rights to the project deliverables remains with the seismic company and project risks are offset through meticulous business case planning supported by written pre-funding commitments from participating oil and gas companies in advance of vessel mobilization.

Most multi-client projects originate from opportunities identified by Polarcus and/or its various partners. However, such projects can also originate from tenders, either through conversion of projects tendered on a proprietary basis or, in jurisdictions where multi-client surveys are the only available option for the conduct of seismic surveys, through tenders by oil companies for the acquisition of the data on a multi-client basis.

Multi-client contracts comprise a Master License Agreement ("MLA") and project-specific supplements. Client licenses are usually based on Polarcus' standard MLA and related standard supplement. On occasion the client will provide its own MLA. Most MLAs in the industry are based on the standard developed by the International Association of Geophysical Contractors, so all are relatively similar. For this reason, negotiations of MLAs can be relatively fast.

The main terms of a standard MLA (and related supplements) are as follows:

Scope: The MLA is a general document which sets out the general terms and conditions of a non-exclusive license granted by the seismic company (or licensor) to the client (or licensee) to use certain seismic data obtained by and belonging to the licensor and their related derivatives (being any product derived, generated, or created from the data). Upon each occasion where the licensor licenses specific multi-client data to the licensee (in the context of a seismic survey in a defined location), the parties will execute a supplement to the MLA. The supplement will identify the specific data licensed, the license fee, payment terms, and other matters concerning the license transaction to which the parties mutually agree.

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Duration: MLAs and supplements are long term contracts (25 years from their respective effective date is a standard). The MLA will however remain effective during the term of any active supplement.

Taxes: Tax provisions and liabilities will vary depending on the jurisdiction of the individual project and on the contracting entities used by each party; but usually any taxes levied or assessed against the licensor as a consequence of the licensing of the data are for the licensee's account.

Ownership of seismic data: The licensor owns, or has exclusive rights to market, the data and derivatives. The licensor has the right at any time to license any part of the data and derivatives to third parties at such prices and on such terms as are determined by the licensor. However, the data and, potentially the derivatives will eventually become part of the public domain (within a time period ranging from 10 to 15 years, depending on the jurisdiction; 10 years being most common). The licensee only has the non-exclusive right to utilize such data subject to the restrictions set out in the MLA. However, the licensee retains ownership of the licensee's interpretations (being interpretations created by the licensee or its consultants that are based upon space and time location of the data and/or derivatives but do not directly incorporate actual data or derivative values or magnitudes).

Confidentiality: The confidentiality provisions of the MLA are the core provision of the document. The data and derivatives constitute valuable and highly confidential intellectual property and trade secrets. Except as expressly permitted by the MLA, the licensee and its employees, officers and third party service providers must keep the data and derivatives strictly confidential, and are not allowed to show or transfer such data. The MLA regulates very strictly the exceptions to this principle. The licensee may make copies, or show the data to its affiliates ("related entities" – the definition of which can be more or less wide) or to certain services providers (subject to confidentiality obligations no less onerous than those set out in the MLA); communicate the data or preferably portions thereof to government agencies if required by law or regulations; and transfer the data to its partners (subject to confidentiality obligations no less onerous than those set out in the MLA, and payment of the applicable license fee). If the licensee is acquired by a third party entity, the MLA automatically terminates unless the license fee, or an agreed portion thereof, is promptly paid to the licensor by the acquirer and the acquirer agrees to be bound by the terms and conditions of the relevant MLA and supplement.

Audit: The licensor generally has the right to audit the licensee's (and its related entities) premises, systems and storage sites to verify that all data and derivatives have been returned or destroyed upon termination for a period of twelve (12) months from the termination of the MLA or any supplements.

Warranties and disclaimers: Most MLAs will include wording to the effect that the licensor's warranties are limited and that the licensor makes no representation or warranty, express or implied, in respect to the quality, accuracy, condition, durability, latent defects, absence of patent, trademark or copyright infringement, or the usefulness of the data and derivatives or otherwise. The evaluation, interpretation or use of the data and/or any derivatives is at the licensee's own risk and responsibility.

Liabilities: Due to the necessity to protect the commercial value of the data, the licensee is fully responsible for all damages, costs or other loss suffered or incurred by the licensor as a direct or indirect result of any misuse or inappropriate disclosure of any portion of the data and/or derivatives and/or licensee derivatives, or other breach of the MLA and the applicable supplement by any of the parties to whom the licensee has disclosed the data and/or derivatives and/or licensee derivatives. The licensor will in turn assume all liabilities relating to the acquiring and processing the data, and will indemnify the licensee any claims arising out of such activities.

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Termination: In most cases the licensor can terminate the MLA or any supplement for breach of the licensee's obligations thereunder (for example: breach of main contractual obligations including failure to pay license fees; insolvency; breach of confidentiality obligations/wrongful disclosure of the seismic data to unauthorized third parties). Usually the MLA grants the licensee a certain period of time to rectify the breach before termination becomes effective. In some MLAs the licensee may also have negotiated the right to terminate in the event of the licensor's breach of the MLA/supplement and failure to so remedy. Supplements may also include separate termination provisions. Upon termination of an MLA or any supplement, the licensee must promptly return and/or destroy all relevant data and derivatives and provide written certification that all copies of such documents have been returned to the licensor or destroyed.

Governing law and dispute resolution: These provisions will depend on the identity and nationality of the licensor and the location of the particular project area. English law and the jurisdictions of English courts are frequent standards.

8.8.3 Lease of POLARCUS NADIA and POLARCUS NAILA

The bareboat charterparty agreements, both dated 30 June 2008 (as later amended) (the "Bareboat Charter Agreements") between GSH2 Seismic Carrier I AS (the "Owner"), the Company and respectively Polarcus Naila AS and Polarcus Nadia AS (the "Charterers") in respect of the vessels MV Polarcus Nadia and MV Polarcus Naila (the "Vessels"), were amended in connection with the 2016 Restructuring and the 2017 Amendments.

Reference is made to section 8.7.3 "—The Polarcus fleet—POLARCUS NADIA & POLARCUS NAILA" in this Prospectus for more information about the Vessels' operational qualities.

The amendments to the Bareboat Charter Agreements involved, inter alia, a three year extension of the charter periods. Subsequently, the charter period for Polarcus Naila will expire on 30 November 2022 and the charter period for Polarcus Nadia will expire on 31 October 2022.

Further, the Vessels' charter rates were adjusted to the following levels:

a. 9,500 (Polarcus Naila) and USD 8,000 (Polarcus Nadia) per day from 1 December 2015 to 31 December 2018; and

b. USD 31,500 (Polarcus Naila) and USD 26,700 (Polarcus Nadia) per day applicable from 1 January 2019 until the end of charter period (as extended).

The adjustments involve a reduction in the Vessels' charter rates by approximately 75% from the previous levels until 1 January 2019 (extended from 1 January 2018 as a consequence of the 2017 Amendments), and thereafter a reduction of approximately 20% from the pre-2016 Restructuring levels.

In addition, a cash sweep mechanism was included in the Bareboat Charter Agreements, providing for sweep of any excess cash during a certain period terminating, at the latest, on 1 January 2018, to be divided between holders of A bonds (18%), the lenders under the Fleet Bank Facility (67%) and the Owner (15%).

The amendments of the Bareboat Charter Agreements also involved a removal of the purchase options to permit a reclassification of the Bareboat Charter Agreements from financial leases to operational leases, reducing the Group's financial indebtedness by USD 167 million.

Furthermore, the Owner of the Vessels was granted a renegotiation right from 1 January 2018 on certain specified conditions and is subsequently entitled to terminate, on an individual basis, the Bareboat Charter Agreements if the Owner and the Company do not reach an agreement after negotiations.

In addition, the Bareboat Charter Agreement for Polarcus Nadia was amended to include

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terms and conditions for a sister ship conversion of Polarcus Nadia corresponding to the twin-fin propulsion conversion of Polarcus Naila.

8.8.4 Bareboat charter of VYACHESLAV TIKHONOV

On 10 August 2011, Polarcus signed a five-year Bareboat Charter Party Agreement with SCF Sakhalin Supply Limited, a subsidiary of OAO Sovcomflot ("SCF") of Russia. In February 2016, SCF exercised an option to extend the term of the original agreement by 3 years until August 2019. Under the terms (as amended) of the Bareboat Charter Party Agreement (the "BBCP"), an eight-streamer Ulstein SX 133 X-Bow vessel with equipment, has been bareboat chartered to SCF. The vessel was delivered to SCF on 18 August 2011 and was on 16 September 2011 renamed VYACHESLAV TIKHONOV.

The BBCP is based on the BIMCO 2001 Standard bareboat charter agreement. Under the BBCP, the charter period can be extended by up to four successive periods of 12 months and three periods of 24 months respectively beyond the current fixed period. From the third anniversary of the delivery date of the vessel under the BBCP and each year onwards, SCF had the option to purchase the vessel for a price of USD 115,100,000 reducing to a minimum of USD 59,000,000 from the eight anniversary onwards. The purchase option can also be exercised in a situation where the owner is in default on the BBCP.

The construction and completion of the vessel and acquisition of equipment was financed by the USD 125,000,000 convertible bond issue described in Section 9.8.3 "—Summary of financing—2.875% Convertible Bond issue 2011/2016". Nordic Trustee ASA has, on behalf of the bondholders, issued a letter assuring SCF's quiet enjoyment of the vessel in the charter period.

In compliance with the agreement, the vessel has been bareboat registered into Russia and is sailing under Russian flag. In connection with the bareboat registration, both Polarcus and the bondholders were granted a power of attorney to deregister the vessel from the Russian flag in a situation where SCF defaults on its obligations under the BBCP and a termination event occurs or if SCF fails to deregister the vessel at the end of the charter period.

The agreement contains detailed provisions on responsibility for insurance, maintenance and operation of the vessel and her equipment, the charterers' responsibility for taxes and fees in the jurisdictions where the vessel operates and the duty to indemnify the owner against any loss, damage or expense incurred by the owners as a consequence of the operation of the vessel. The BBCP furthermore contains standard default and termination clauses.

The charter hire under the BBCP was originally secured by an escrow account with a deposit equal to four months charter hire and assignment of insurances. The escrow account was replaced by a parent company guarantee from the parent of the charterer in 2013.

The agreement is governed by English law with arbitration in accordance with London Maritime Arbitrators Association ("LMAA") as dispute venue.

8.8.5 Seismic data acquisition agreement, and management and crewing agreement with Turkish Petroleum Corporation

On 11 February 2013 the subsidiary Polarcus Samur AS completed the sale of the POLARCUS SAMUR, an eight-streamer Ulstein SX 133 X-Bow vessel with seismic equipment to the Turkish Petroleum Corporation ("TPAO"), further to a memorandum of agreement dated 31 December 2012 ("MOA"). The MOA was based on the Norwegian Shipbroker's Association's standard Saleform 2012, as adopted by BIMCO. POLARCUS SAMUR was thereafter renamed "Barbaros Hayreddin Paşa" and is sailing under the Turkish International flag.

Simultaneously to the delivery of POLARCUS SAMUR to TPAO, Polarcus commenced a three year collaboration with TPAO covering seismic data acquisition, fast-track data processing, management and crewing for the vessel.

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The Polarcus-TPAO collaboration agreements were renewed on 11 February 2016 for two years. The current agreement includes seismic data acquisition, on-board quality control and management and crewing for the vessel, Barbaros Hayreddin Pasa. The agreements will expire after a two year term unless the parties, three months prior to the end of the term, decide to extend their duration for an additional one year at the current terms, or otherwise on mutually agreed terms. The agreements contain standard warranties, indemnities, insurance, termination and confidentiality provisions as are usual for this type of agreement. Furthermore liability for consequential losses is excluded, and the Contractor's liability for default and delay under the agreement is limited. The agreement is governed by Turkish law with arbitration in Istanbul in accordance with the arbitration rules of the international chamber of commerce (ICC).

The total value of the agreements with TPAO is approximately USD 30 million for the two year term.

8.8.6 Agreement for data processing

On 30 June 2014 the subsidiary Polarcus DMCC, on behalf of the Polarcus Group companies, entered into an agreement for the provision of onboard data processing systems and associated training and support services with DUG, under which DUG shall from 1st July 2014:

lease, install and maintain, on an exclusive basis, data processing hardware and software ("Systems") on board all Polarcus operated vessels (other than VYACHESLAV TIKHONOV and Barbaros Hayreddin Paşa) and at Polarcus' Dubai office;

provide support and training services to Polarcus processing personnel, allowing them to properly use the Systems for real time seismic data quality control and fast track processing;

provide Polarcus with the right to associate itself with the DUG's broadband technology "DUG Broad" for marketing purposes; and

at Polarcus' option: Provide Polarcus with access to DUG's research and development capabilities (including the development of any new software module and the definition, development and testing phases of the "Real-Time and Offline Acquisition QC Software") and also allocate one or more DUG experienced employees (a senior seismic processing geophysicist and/or a seismic processing geophysicist) at Polarcus' Dubai offices whose role shall be to facilitate the due performance of DUG's obligations under the agreement.

All Systems are installed on-board the Polarcus vessels and operational. Training and support as well as DUG Broad, DUG employee secondment and R&D access (where the latter are required) shall be provided throughout the term of the agreement.

In consideration for the provision of all non-optional services under the agreement, Polarcus shall pay DUG various fees, with an approximate total amount of USD 6 million per year.

The agreement includes indemnity, liability (including liability for default and delay), insurance, termination, confidentiality, EHSQ and business ethics provisions normal for such agreements as well as provisions concerning intellectual property rights.

The agreement term is for an initial period of 42 months from its effective date (being 1st July 2014) and is thereafter renewable for up to two 12 months periods unless terminated by either party by giving 6 months' notice prior to the expiration of the initial term or any renewed terms.

The agreement is governed by English law with arbitration in London in accordance with the International Arbitration Rules of the London Court of International Arbitration (LCIA).

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8.8.7 Contract for strategic consultancy services

Carl-Peter Zickerman, formerly employed by the Company as Executive Vice President Strategic Investments and Company founder, has moved from being an employee to a consultant with Zickerman Group Consultancy DMCC, which has been engaged to provide business and advisory consultancy services to the Company, in particular in relation to corporate, financial, business development and related strategic matters, pursuant to a Consultancy Agreement between Polarcus DMCC and Zickerman Group Consultancy DMCC dated 16 January 2016. Services commenced on 1 February 2016.

Carl-Peter Zickerman has valuable experience in the seismic industry, gained from his prior start-up ventures, Eastern Echo Ltd where he held the position of Executive Vice President Business Development. Prior to this he was the Managing Director and founder of GeoBird Ltd., a marine seismic service provider, later sold to SeaBird Exploration Ltd. His experience covers both maritime and seismic operations, including vessel conversions and new builds. Carl-Peter holds a B.Sc. in Marine Engineering from Kalmar Maritime College, Sweden.

Mr. Zickerman has not held any other directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries).

8.8.8 Collaboration Agreement with TGS

On 17 November 2016, Polarcus announced the execution of a collaboration agreement with TGS-NOPEC Geophysical Company ASA ("TGS"). Under the agreement, the parties agreed rates at which the Group would provide seismic acquisition services to TGS for certain multi-cilent projects and the terms on which the parties agreed to collaborate on these multi-client opportunities. The term of the agreement expires on 31 December 2017 and may be extended for two further terms of 1 year each. The agreement also provided Polarcus with a right of first refusal to provide TGS with services to acquire 3D seismic data over an area of up to 10,000 km2 subject to certain conditions.

8.8.9 Heads of Agreement for Bareboat charter of POLARCUS AMANI

On 9 Feruary 2017, Polarcus announced that one of its Norwegian subsidiaries has entered into a heads of agreement with SCF GEO AS ("Sovcomflot"), to charter a vessel on bareboat terms with delivery scheduled for March, 2017 (the "Charter"). The fixed period of the Charter will be 5 1/2 years with options to extend for up to four additional months. The nominated vessel is "POLARCUS AMANI". The vessel will be delivered without streamers and the streamer package currently on board the vessel will be available for use across the Polarcus fleet. The Charter will generate minimum hire of USD 72 million over the fixed charter period with the possibility of increased charter hire fees based on Sovcomflot benefitting from certain market improvements. Sovcomflot will have the right to purchase the vessel at any time during the charter at pre-agreed prices.

The Charter is subject to finalizing terms with Sovcomflot and satisfying industry-standard conditions required by the bank lenders who have mortgagee rights over the vessel. The terms will be based on the agreement for VYACHESLAV TIKHONOV described in Section 8.8.4 "Business - Material contracts – Bareboat charter of VIYACHESLAV TIKHONOV" and with amendments and supplemental terms to the industry standard BARECON 2001 form. There is no guarantee that the Charter terms will be finalized in an agreed period or on the terms described above.

8.8.10 Contracts with local consultants

Certain jurisdictions around the world require local representation in order for any foreign contractor to be awarded a seismic survey contract or in some cases to be able to bid for a contract.

Various Polarcus Group companies have for this purpose entered into agreements with

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several consultants, including consultants in Malaysia, Indonesia, Egypt, Mexico, India, Turkey, Brazil and Nigeria. Each consultant acts as such on an exclusive basis for the relevant Polarcus Group companies.

The relationships with local consultants are normally entered into pursuant to a standard form of agreement developed by Polarcus. The agreements (i) define the territory of each consultancy agreement, (ii) list the different obligations of the consultants, such as the marketing obligation, the duty to inform Polarcus of upcoming projects, the duty to assist the Polarcus Group in preparing and submitting tenders, the duty to give appropriate assistance in connection with a survey and the duty to liaise with local authorities, (iii) emphasize the consultant's obligation to comply with applicable laws and regulations, including anti-corruption and bribery laws, regulation and principles, and (iv) stipulate the commission of the consultant, normally in the region of between 2% and 5% of the revenue paid to Polarcus less certain other fees and expenses. The agreements normally do not include a retainer fee to the consultants. The agreements otherwise include indemnity, liability, termination and confidentiality provisions normal for such agreements as well as provisions concerning intellectual property rights. The duration of the agreements varies from 12 months to 3 years. The agreements are governed by English law or local law if mandatory under such local law or as otherwise negotiated with the consultant.

8.8.11 Agreements with multi-client consultants

Polarcus has through its various subsidiaries entered into agreements with certain specialist consultants for the provision of expert local assistance in the development, planning, and marketing of 3D multi-client projects.

The relationships with such consultants are normally entered into pursuant to a standard form of agreement developed by Polarcus. The agreements (i) define the territory of each agreement, (ii) list the different obligations of the consultants, such as the duty to identify, develop and market potential and actual projects, the duty to assist Polarcus in planning and designing optimal surveys, the duty to give appropriate assistance in connection with a survey and the duty to liaise with local authorities, the duty to negotiate relevant documentation with clients, (iii) emphasize the consultant's obligation to comply with applicable laws and regulations, including anti-corruption and bribery laws, regulation and principles, and (iv) stipulate the retainer fee and/or the commission of the consultant. The agreements otherwise include indemnity, liability, termination and confidentiality provisions normal for such agreements as well as provisions concerning intellectual property rights. The duration of the agreements varies from 12 months to 3 years. The agreements are governed by English law or local law if mandatory under such local law or as otherwise negotiated with the consultant.

The subsidiary Polarcus Serviços Geofísicos Do Brasil Ltda ("Polarcus Do Brasil Ltda"), on behalf of the Polarcus Group companies, on 26 August 2014, entered into a non-exclusive agreement with Brazilian company Sinergeo Consultoria e Representaçoes Ltda for the exclusive provision by Sinergeo of assistance in the development, marketing, and execution of 3D proprietary as well as multi-client projects in Brazil. Under the terms of this agreement Polarcus pays Sinergeo a monthly fee retainer plus a fixed sales commission on any net project revenues. The agreement is valid for an initial period of three years from its effective date (being 1st September 2014) and is thereafter renewable in annual periods unless terminated by either party by giving 60 days' notice prior to the expiration of the initial term or any renewed terms. The agreement is governed by English law with arbitration in London in accordance with the rules of the London Maritime Arbitrators Association (LMAA).

As part of the agreement with DownUnder GeoSolutions (DUG) entered into in June 2014, DUG has the right but not the obligation to participate in all Polarcus multi-client projects through providing its data processing services as a cost-contribution to the project which secures DUG a corresponding revenue contribution from the project. The duration of the agreement with DUG is 42 months (from June 2014).

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See also, Section 8.3.2 for detail of the multi-client collaboration with TGS-NOPEC Geophysical Company ("TGS").

8.8.12 Other contracts related to the operation of the vessels

Polarcus has entered into various time charters for the chartering of support vessels related to the various surveys the vessels are involved in. Certain of the charters have a duration of more than one year, while most charters are for shorter periods and are connected to one particular survey. The charters are all based on amended BIMCO provisions negotiated between the parties for the specific services to be provided.

The Group has furthermore entered into agreements for medical and logistical support and with certain agency companies for certain on-board services.

The vessel-owning entities regularly use the services of local ship agents and helicopter service providers in its operations.

8.8.13 Research and development policies

The Company does not plan any major R&D projects, but keeps under constant review the design and construction of its new build fleet as well as the nature of its geophysical offerings. Significant attention has been paid to the handling system and the back deck operations area with the aim of making source array and streamer deployment and retrieval as efficient as possible and to obtain optimal drag reduction.

Polarcus has developed a seismic source array with an improved frequency response that combined with the selected solid streamer and recording system displays an improved signal quality. In addition the source is more efficient than competitive sources as less air volume is required for the same energy output. Polarcus has further developed an alternative source array with less energy output with the intention to offer this source as an environmental alternative to the larger source by doing a test line and analysing the result prior to commencing the survey. This can be obtained without losing any significant time, and can give the client an option for choosing a source with lower acoustic energy. This can be of significant economic and environmental importance, e.g. in mitigating interference with marine mammals.

The Company is, together with a Norwegian company, developing a system for steering the seismic source in the lateral plane. This has an advantage for controlling the position of the source and can improve positioning during 4D surveys where repetition of last survey source position is important. It is further envisaged that there will in the future be a directed R&D effort into improving the operational efficiency and environmental credentials of the vessels.

Other key innovations that the Company has developed are the XArray™ and RightFLOW™ products and services which are outlined in Sections 7.3.1 "Industry and market—Positioning of Polarcus in the market—XArray™: Efficient and high quality 3D seismic acquisition" and 7.3.2 "Industry and market—Positioning of Polarcus in the market—RightFLOW™: advanced seismic solutions for reducing exploration costs" respectively.

The Company has not spent material amounts on R&D projects during the period covered by historical financials.

8.8.14 Leased offices

The Company has leased offices in Dubai of 14,000 sq.ft. at an annual rent of approximately USD 700,000, in Houston of 2,600 sq.ft. at an annual rent of approximately USD 100,000, in Singapore at an annual rent of approximately USD 130,000 and in Gatwick, London at an annual rent of approximately USD 120,000. Furthermore, the Company rents small serviced offices in Stavanger, Norway.

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8.8.15 Environmental focus

Polarcus has focused on a series of environmental initiatives across all business lines and at all levels of operations and is committed to minimize the environmental footprint of the Company's activities. This commitment is embedded in the Company's core values of Responsibility, Innovation and Excellence and part of in the Company's Vision is to operate an environmentally responsible company that we envision as being an inspiration and model for others in our industry and beyond. The commitment to minimizing the Company's environmental footprint has been a key factor in the successful recruitment of many employees of all experience levels into the Company.

The Company in July 2008 became a core member of the International Association of Geophysical Contractors ("IAGC") and the Polarcus Chief Executive Officer ("CEO") was elected to the IAGC Board of Directors in September 2008. The IAGC maintains several programs and initiatives relating to environmental matters and the Company is an active participant in the various committees and sub-committees for such work.

There are several environmental issues that may arise in the operation of the vessels. The Company has implemented a number of mitigations for those relating to emissions.

The Company recognizes four emission types; solid, fluid, gaseous, and acoustic, and two physical sources of these emissions; the seismic survey vessel itself, and the in-sea seismic acquisition equipment.

In order to measure the effectiveness of emissions mitigation, Polarcus measures emissions of polluting gasses such as NOx, SOx, and COx from the Company's vessels on a 'per vessel, per month' basis. In so doing, Polarcus is the first and only seismic company in the industry to have received the Det Norske Veritas "Vessel Emissions Qualification Statement", awarded to the Company in Q2 2010.

Through this measurement process Polarcus is able to determine the success of its emissions reduction systems and to set goals for continuous improvement. To reduce the emissions of major polluting gases the Company has incorporated high specification catalytic converters across the seismic fleet to reduce emissions of harmful NOx gasses. NO2 is a major greenhouse gas and air pollutant, with ~ 250 times more impact per unit weight than CO2. The selective catalytic reduction process on the exhausts uses urea to effectively reduce NO2 to simple nitrogen gas and water. The catalytic convertors also have positive effects on residual hydrocarbons, soot, and even sound, with the ability to substantially reduce emissions as follows:

NOx Reduction: 90 - 98%

HC Reduction: 80 - 90%

HC Soot Reduction: 20 - 30%

Sound Attenuation: 20 - 35dB(A)

To mitigate SOx emissions, Polarcus has chosen to use the cleaner bunker fuel, marine gas oil ("MGO") and does not use heavy fuel oil ("HFO"). Under the Dangerous Substances Directive as set out by UN, all HFOs on the market today are classified as carcinogenic (cat. 2), harmful and dangerous for life and the environment. MGO by contrast is a distillate from the refinery process with much lower viscosity, lower sulphur content (typically < 0.2% Sulphur) and lower PCA (polycyclic aromatics) than HFO. Polarcus uses low-sulphur MGO across its seismic fleet.

Mitigating emissions of non-gaseous pollutants from seismic vessels

Polarcus has incorporated design features such as the DP2 dynamic positioning system, a double hull, and advanced ballast and bilge water treatment systems to reduce or eliminate the emissions of non-gaseous pollutants from seismic vessels into the sea. The incorporated

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measures have enabled the Company to achieve the DNV CLEAN-DESIGN class notation across the Company's seismic fleet.

Polarcus' seismic source array is well balanced and requires less air volume than other seismic sources for the same energy output and thus reduces the energy consumption from the seismic compressors. The Company further offers an alternative seismic source with lower energy output as an option.

Seismic impact on marine mammals has significant focus across the industry, and Polarcus has proactively installed passive acoustic monitoring ("PAM") systems on all vessels that, when operated can help detect the presence of cetaceans in the vicinity of the seismic vessel when visibility is poor or at night.

Other factors that might impact the operation and utilization of the seismic vessels are:

Illegal interference from environmental activists opposed to the industry

This has from time to time in the industry been encountered in certain areas. Polarcus has not been exposed to any encounters of material significance. The Company remains vigilant to monitor such interference and the Company's policy regarding this matter is to adopt a non-confrontational approach at all times.

Legislative bans on doing surveys in certain areas

This may be a seasonal issue or in some areas also a permanent issue that can be accommodated with proper planning and implementation. The vessels, due to the CLEAN-CLASS notation and BWM-T notations, may be able to enter areas that other seismic vessels are not able to enter.

Reduction in production due to restriction related to mammals and other sea creatures

Restrictions on conducting seismic (the activation of the high pressure air energy source) in close proximity to mammals is becoming an increasingly important issue for the industry. This is regulated by legislation in many countries and can be accommodated with proper planning. Polarcus has installed specialist PAM systems on-board its vessels that can, when used by the client, reduce the uncertainty regarding the presence of cetaceans near the vessel.

Restrictions in certain areas due to seasonal fish migration or mating

Restrictions due to seasonal fish migration or mating is legislated in certain areas and can be accommodated with proper planning.

With the DP2 system, double hull and cleaning of emissions, both to air and water, Polarcus vessels enjoy a competitive advantage over other seismic vessels. Polarcus may be able to enter some environmentally sensitive areas where some or all of the advance design features could be a requirement for entry and prevent other vessels from entering the area. The double hull provides additional security in the event of a collision or grounding and reduces the risk of pollution.

8.9 Organizational structure

8.9.1 Description of Group that the Company is part of

Polarcus Limited is the holding company of the Group.

The legal structure of the Polarcus Group as the date of this Prospectus is depicted below.

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All subsidiaries, except Polarcus Nigeria Limited and Polarcus Ghana Limited, are 100% directly or indirectly owned by Polarcus Limited. Polarcus Nigeria Limited is owned 49/51 with Ashbert Limited. Polarcus Ghana Limited is owned 90/10 with Lysam Limited.

A description of the individual companies is given below.

8.9.2 Polarcus Limited

Polarcus Limited is a Cayman Islands tax exempted company with limited liability registered with the Cayman Islands Registrar of Companies with registration number 201867. The Company was incorporated on 17 December 2007. Polarcus Limited's registered office is c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman, Cayman Islands. The management is located at Almas Tower, Level 32, P.O. Box 283373, Dubai, U.A.E. Polarcus Limited is the holding company of the Group and has the overall responsibility at the group level for making strategic decisions. Currently the majority of all crew working on the Polarcus Group vessels are employed by Polarcus Limited. As of 31 December 2016, the Company had 311 employees.

8.9.3 Polarcus Selma Ltd.

Polarcus Selma Ltd. (formerly Polarcus 4) is a Cayman Islands tax exempted company with limited liability incorporated under the laws of the Cayman Islands. The registration number of Polarcus Selma Ltd. in the Cayman Islands registry is 204020 and its registered office is the same as that of Polarcus Limited. Polarcus Selma Ltd. does not have Any employees. Polarcus Selma Ltd. owns the vessel M/V POLARCUS SELMA which has been bareboat chartered to an OAO Sovcomflot company under the name VYACHESLAV TIKHONOV since delivery in August 2011.

8.9.4 Polarcus DMCC

Polarcus DMCC is a limited liability company incorporated in the Dubai Multi Commodities Centre free zone under the laws of the United Arab Emirates. The registration number of Polarcus DMCC is DMCC 1143. The registered office is Almas Tower, Level 32, Jumeirah Lakes

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Towers, P.O. Box 283373, Dubai, U.A.E. Polarcus DMCC serves as the main administration company of the Group and provides services to the various Group companies related to sales, marketing and operation of vessels as well as general administrative services. As of 31 December 2016, Polarcus DMCC had 91 employees.

8.9.5 Polarcus Seismic Limited

Polarcus Seismic Limited is a Cayman Islands tax exempted company with limited liability incorporated under the laws of the Cayman Islands. The registration number of Polarcus Seismic Limited in the Cayman Islands registry is 213496 and its registered office is the same as that of Polarcus Limited. Polarcus Seismic Limited does not have any employees. Polarcus Seismic Limited acts in certain jurisdictions as contractor for seismic work of the Group and is the counterparty in various consultancy agreements entered into by the Polarcus Group.

8.9.6 Polarcus UK Limited

Polarcus UK Limited is a company with limited liability incorporated under the laws of England and Wales. The registration number of Polarcus UK Limited is 7068161 and its registered office is at St. James House, 13 Kensington Square, London W8 5HD, UK. Polarcus UK Limited carries out marketing and sales services as well as multi-client activities and in certain circumstances carried out seismic projects in certain jurisdictions. As of 31 December 2016, the Company had 10 employees. Polarcus UK Limited is furthermore the holding company of Polarcus Shipholding AS, Polarcus Nadia AS, Polarcus Naila AS, Polarcus France SAS and holds 99% of the shares in Polarcus do Brasil Ltda (Polarcus Seismic Limited holds the remaining 1%). In addition, Polarcus UK Limited holds 90% of the shares in Ghana Limited (Lysam Limited holds the remaining 10%).

8.9.7 Polarcus Nadia AS

Polarcus Nadia AS is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Nadia AS is 994063901 and its registered office is at c/o Wikborg Rein & Co, Kronprinsesse Marthas Plass 1, 0160 Oslo, Norway. The company leases the vessel POLARCUS NADIA from the vessel owner. POLARCUS NADIA is currently cold stacked. The company has currently no employees.

8.9.8 Polarcus Naila AS

Polarcus Naila AS is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Naila AS is 995097893 and its registered office is at c/o Wikborg Rein & Co, Kronprinsesse Marthas Plass 1, 0160 Oslo, Norway. The company leases the vessel POLARCUS NAILA from the vessel owner. Polarcus Naila AS either leases the vessel to group companies or undertakes seismic surveys in its own name. The company has currently no employees.

8.9.9 Polarcus Shipholding AS

Polarcus Shipholding AS (formerly named Polarcus Asima AS) is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Shipholding AS is 995 542 846 an its registered office is at c/o Wikborg Rein & Co, Kronprinsesse Marthas Plass 1, 0160 Oslo, Norway. The company acts as a holding company for four Norwegian companies which own vessels. The company has currently no employees.

8.9.10 Polarcus Alima AS

Polarcus Alima AS is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Alima AS is 995963426 and its registered office is at c/o Wikborg Rein & Co, Kronprinsesse Marthas Plass 1, 0160 Oslo, Norway. The company has currently no employees. The company owns the vessel POLARCUS ALIMA and leases the vessel to group companies or undertakes seismic surveys in its own name.

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8.9.11 Polarcus Asima AS

Polarcus Asima AS is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Asima AS is 998025877 and its registered office is at c/o EconPartner AS, Dronning Mauds gate 15, 0250 Oslo, Norway. The company has currently no employees.The company owns the vessel POLARCUS ASIMA and leases the vessel to group companies or undertakes seismic surveys in its own name.

8.9.12 Polarcus Amani AS

Polarcus Amani AS is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Adira AS is 998025966 and its registered office is at c/o EconPartner AS, Dronning Mauds gate 15, 0250 Oslo, Norway. The company has currently no employees. The company owns the vessel POLARCUS AMANI and leases the vessel to group companies or undertakes seismic surveys in its own name.

8.9.13 Polarcus Adira AS

Polarcus Adira AS is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Adira AS is 998026016 and its registered office is at c/o EconPartner AS, Dronning Mauds gate 15, 0250 Oslo, Norway. The company currently has no employees. The company owns the vessel POLARCUS ADIRA and leases the vessel to group companies or undertakes seismic surveys in its own name.

8.9.14 Polarcus do Brasil Ltda

Polarcus do Brasil Ltda. is a company limited by quotas incorporated under the laws of Brazil with registration number 11.428.425/0001-12. The registered office of the company is at Andar – Bloco Pao de Acucar, Praia de Botafogo 501, Centro – Empresarial Mourisco, Botafogo, Rio de Janeiro, Brasil. The company currently has no employees. The company is responsible for the Group's sales and marketing activities in Brasil. The company enters into contracts with external clients to undertake seismic services, provide technical services and license data to clients in Brasil.

8.9.15 Polarcus Egypt Limited

Polarcus Egypt Limited is a company limited by quotas incorporated under the laws of Egypt with registration number 41735. The registered office of the company is at 7 Al-Athary Mahmoud Akoush Street, Ard El-Golf, Nasr City Awal, Cairo, Egypt. The company currently has no employees. The company is responsible for the Group's sales and marketing activities in Egypt and enters into contracts for the provision of seismic services.

8.9.16 Polarcus Multi-Client (CY) Limited

Polarcus Multi-Client (CY) Limited is a company with limited liability incorporated under the laws of Cyprus. The registration number of Polarcus Multi-Client (CY) Limited is 267816 and its registered office is at c/205 Christodoulou Chatzipavlou, Loulloupis Court, 4th Floor, Office 401, 3036 Limassol, Cyprus. The company was intended to handle the Group's multi-client business and data library but has later become a crew provider in respect of a portion of the Group's crew. As of 31 December 2016, the Company had 8 employees.

8.9.17 Polarcus Norway AS

Polarcus Norway AS is a company with limited liability incorporated under the laws of Norway. The registration number of Polarcus Norway AS is 996798305 and its registered office is at c/o Wikborg Rein & Co, Kronprinsesse Marthas Plass 1, 0160 Oslo, Norway. The company is responsible for certain sales and multi-client activities in Norway, and occasionally entering into seismic contracts. As of 31 December 2016 the company had one employee.

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8.9.18 Polarcus US Inc.

Polarcus US Inc. is a limited liability company incorporated under the state of Delaware in the U.S.A. The registered office of Polarcus US Inc. is c/o Capitol Services Inc., 615 South DuPont Highway, Dover, Kent County, Delaware 19901, U.S.A. The company is responsible for the marketing and business development activities of the Group in the Americas region, and entering into some seismic contracts. As of 31 December 2016, the Company had 6 employees.

8.9.19 Polarcus MC Ltd.

Polarcus MC Ltd. (formerly Polarcus 5) is an exempted company validly incorporated with limited liability in the Cayman Islands, is registered with the Registrar of Companies in the Cayman Islands with registration number 204065 and and regulated by the Companies Law. Its registered office is the same as that of Polarcus Limited. Polarcus MC Ltd. does not have any employees. Polarcus MC Ltd. was the purchaser of vessel POLARCUS ASIMA. Upon delivery of the vessel, the vessel was sold to Polarcus Asima AS (see above). The company was renamed Polarcus MC Ltd. in 2011 and carries out certain of the Group's multi-client projects. As per June 2011 50% of the company was acquired by Sabaro Investments, however Polarcus Limited reacquired these shares with effect from 15 April 2012. The company is therefore now a 100% subsidiary of Polarcus Limited.

8.9.20 Polarcus Nigeria Limited

Polarcus Nigeria Limited is a limited liability company incorporated under the laws of Nigeria. The registration number of Polarcus Nigeria Limited in Nigeria Corporate Affairs Commission is 1024228 and its registered office is 196b, Awolowo Road, Ikoyi, Lagos, Nigeria. Polarcus Nigeria Limited does not currently have any employees. The company is responsible for the marketing and business development activities of the Group in Nigeria. The company is owned 49/51 with Polarcus' business partner in Nigeria, Ashbert Limited.

8.9.21 Polarcus Asia Pacific Pte. Ltd.

Polarcus Asia Pacific Pte. Ltd. is a limited liability company incorporated in Singapore. The registered office of Polarcus Singapore Pty Ltd is c/o Wikborg Rein & Co I Fullerton Road #02-01 One Fullerton Singapore 049213. The company carries out marketing and sales as well as multi-client activities in South East Asia and Australia and in certain circumstances carries out seismic projects in the region. The company owns the Group's multi-client data library in Australia. As of 31 December 2016, the Company had 8 employees.

8.9.22 Polarcus France SAS

Polarcus France SAS is a limited liability company incorporated in France with immatriculation number 804 999 902. The registered office of Polarcus France SAS is 121 avenue des Champ-Elysèes 75008 Paris, France. The company currently has no employees. The company has a branch in Senegal and undertakes several of the Group's seismic surveys in Africa.

8.9.23 Polarcus Ghana Limited

Polarcus Ghana Limited is a limited liability company incorporated in Ghana under the Laws of Ghana. The registration number of Polarcus Ghana Limited is CS078482016, with its registered address at No. 4 Momotse Street, Momotse Avenue, Adabraka, Accra, Ghana. Polarcus Ghana Limited does not currently have any employees. The company is responsible for the marketing and business development activities of the Group in Ghana. The company is owned 90/10 with Polarcus' business partner in Ghana, Lysam Limited.

8.9.24 Polarcus US Inc-Surcursal Colombia

Polarcus US Inc-Surcursal Colombia is a branch of Polarcus US Inc established in Columbia with the registration number 900973118-1 and with its registered address at c/o Capitol

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Services Inc, 615 South DuPont Highway, Dover, Kent County, Delaware 19901, United States of America. The company currently has no employees.

8.9.25 Other Polarcus Entities

Polarcus has several dormant companies including Polarcus 1, Polarcus 2, Polarcus 6 and Polarcus Samur Ltd.

8.10 Legal and arbitration proceedings

Other than the proceedings listed below, the Company is not aware of any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past significant effects on the Company and/or the Group's financial position or profitability.

8.10.1 Dispute with Schottel

Schottel GmbH ("Schottel") developed and supplied four different thrusters to two Polarcus vessels, the MV "Polarcus Naila" and MV "Polarcus Nadia" (the "Vessels"), both Vessels being chartered by Polarcus companies under bareboat charter. All four thrusters installed on the Vessels repeatedly failed causing severe operational downtime, giving rise to four different claims brought by the charterers, Polarcus Naila AS and Polarcus Nadia AS, against Schottel in the Koblenz courts, Germany (where Schottel is domiciled). The total value of the claims is approximately USD 66.2 million. Schottel has, in turn, asserted a claim against Polarcus DMCC in the amount of EUR 1,618,170, being unpaid invoice(s) for spare parts provided and repairs made by Schottel to "Polarcus Naila". The proceedings are currently pending before the German court.

8.10.2 Dispute with East Guardian

On 16 February 2016, the Company received a letter informing that the Company would be served with conciliation proceedings by East Guardian Asset Management AG ("East Guardian"), a holder of bonds in the bond issue with ISIN NO 001 0680150 where the 2016 Restructuring plan was approved with 90.46% of the votes in the bondholders' meeting 22 January 2016. East Guardian has claimed that this approval is invalid as the amendments allegedly required unanimity amongst bondholders and provide unequal treatment among the creditors. No such notice has been received by the Company.

On 18 November, 2016 East Guardian issued a writ against Nordic Trustee ASA and the "community of bondholders" on the same basis. The Company is of the opinion that these allegation are utterly without merit. If East Guardian were right in its allegations, a very large number of restructurings and amendments carried out in the Norwegian bond market since 2005 would be invalid.

In April 2016, the Company received a notice of East Guardian's intention to litigate against the board members claiming damages for economic loss caused by board members having "negligently omitted information from the market and, concerning the present board members, have carried out an invalid resolution adopted at a bondholder's meeting" (where the latter presumably refers to the matters mentioned above). The claims are not further explained nor substantiated, and are in the Company's view completely without merit. As at the date of this Prospectus neither the Company nor any board member has received any further notice or claim.

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9. OPERATING AND FINANCIAL INFORMATION

The following consolidated financial information has been derived from the Company's unaudited condensed consolidated interim financial statements as of and for the three and twelve months ended December 31, 2016 (the "Interim Financial Statements") and the Company's audited consolidated financial statements for 2013, 2014 and 2015 (the "Annual Financial Statements"). The selected financial information set forth below should be read in conjunction with Polarcus' published financial statements, including the notes that form part of those financial statements. The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

The historical financials are incorporated by reference to this Prospectus:

Fourth Quarter Report 2016

http://www.newsweb.no/newsweb/attachment.do?name=Polarcus+Fourth+Quarter+2016+Report.pdf&attId=158528

Fourth Quarter Report 2015

http://hugin.info/151377/R/1990028/731030.pdf

Annual Report 2015


Annual Report 2014

https://polarcus.com/media/1498/annual-report-2014-final-v2.pdf

Annual Report 2013


The financial statements for 2013, 2014 and 2015 were audited by Polarcus' auditor, Ernst & Young AS, independent accountants.

9.1 Summary of significant accounting policies

The principle accounting policies applied in the preparation of the consolidated financial statements can be found in note 2 in the Annual Report 2015 and note 2 of the Fourth Quarter Report 2016 incorporated by reference in Section 15.2 "Additional information—Incorporation by reference" in this Prospectus.

9.1.1 Multi-Client amortization

Understanding the method of amortization of the Company's Multi-Client library is important in understanding the Company's financial performance and position. Please refer to note 2.8 in the Annual Report 2015, incorporated by reference in Section 15.2 "Additional information—Incorporation by reference" in this Prospectus, for the accounting policy on Multi-Client amortization. The accounting policy was amended with affect from 1 January 2016. Please refer to note 2 in the Q4 2016 Report, incorporated by reference in Section 15.2 "Additional information—Incorporation by reference" in this Prospectus, for the amended accounting policy.







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9.2 Consolidated historical financial information

9.2.1 Consolidated statement of comprehensive income


(In thousands of USD) Q4 2016 Q4 2015 31-Dec-16 31-Dec-15 31-Dec-14 31-Dec-13

Revenues Contract revenue 36,024 53,903 185,095 270,757 419,185 496,422 Multi-client revenue 11,224 12,070 56,569 92,819 44,535 33,748 Other income - 6,477 1,752 13,895 2,989 2,075 Total Revenues 47,248 72,450 243,416 377,471 466,709 532,245 Operating expenses Cost of sales (45,625) (58,119) (176,850) (204,287) (296,817) (302,962) General and administrative costs (4,246) (5,958) (19,358) (21,536) (19,765) (17,396) Provision for onerous contracts (26,356) (8,803) (46,356) (8,803) - Depreciation and amortization (11,255) (19,054) (48,672) (72,414) (79,089) (73,776) Multi-client amortization (21,000) (10,481) (56,807) (69,274) (37,228) (16,524) Impairments (24,774) (247,373) (26,658) (315,430) (35,111) (3,495)

Total Operating expenses (133,256) (349,788) (374,701) (691,744) (468,010) (414,153) Operating profit (86,008) (277,338) (131,285) (314,273) (1,301) 118,092 Share of profit/(loss) from joint ventures - (45) (1,220) (983) (280) (265) Finance costs (8,548) (13,770) (37,041) (61,136) (85,293) (80,100) Finance income 780 2,855 1,961 12,395 21,793 6,348 Changes in fair value of financial instruments (1,569) (1,401) 13,315 (9,013) (13,310) - Gain on financial restructuring - - 177,787 - - -- Gain on acquisition of joint venture - - - - - - Profit before tax (95,346) (12,362) 154,802 (373,011) (78,392) 44,075

Income tax expense (1,650) 527 (3,243) (1,093) (243) (609) Net profit and total comprehensive income (96,996) (289,173) 20,274 (374,105) (78,635) 43,466

Earnings per share attributable to the equity holders during the period (In USD)

- Basic (0.183) (4.317) 0.046 (5.585) (0.145) 0.086

- Diluted (0.183) (4.317) 0.046 (5.585) (0.145) 0.086

9.2.2 Consolidated balance sheet

Unaudited Audited Audited Audited

(In thousands of USD) 31-Dec-16 31-Dec-15 31-Dec-14 31-Dec-13

ASSETS

Non-current Assets

Property, plant and equipment 443,377 634,419 927,815 972,802

Multi-client project library 45,107 50,828 88,731 88,704

Investment in joint ventures - 1,220 2,203 2,483

Intangible assets - 255 31,969 36,739

Total Non-current Assets 488,484 686,721 1,050,718 1,100,728

Current Assets

Receivables from customers 47,595 58,755 73,056 103,425

Other current assets 21,337 34,185 41,658 29,996

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Restricted cash 731 14,519 8,236 20,471

Cash and bank 13,731 53,976 65,488 60,045

Total Current Assets 83,394 161,434 188,437 213,937

TOTAL ASSETS 571,878 848,156 1,239,156 1,314,665

EQUITY and LIABILITIES

Equity

Issued share capital 5,305 13,396 13,396 10,144

Share premium 586,401 532,222 532,222 501,843

Other reserves 29,865 32,556 33,149 38,533

Retained earnings/(loss) (442,764) (466,309) (93,302) (22,942)

Total Equity 178,807 111,865 485,465 527,578

Non-current Liabilities

Bond loans 34,582 - 226,743 202,801

Long-term finance lease - - 165,278 154,333

Other interest bearing debt 858 644 236,345 277,262

Long-term provisions 37,320 - - -

Other financial liabilities 10,511 22,324 13,310 -

Total Non-current Liabilities 83,271 22,968 641,676 634,397

Current Liabilities

Bond loans - 220,625 - 37,110

Finance lease - 166,018 8,394 5,897

Other interest bearing debt 249,649 256,911 44,358 41,656

Provisions 6,820 8,803 - -

Other accruals and payables 34,402 30,858 40,206 29,518

Accounts payable 18,929 30,109 19,056 38,509

Total Current Liabilities 309,880 713,323 112,015 152,690

TOTAL EQUITY and LIABILITIES

571,878 848,156 1,239,156 1,314,665

9.2.3 Consolidated cash flow statement



Q4 2015

31-Dec-16

31-Dec-15

31-Dec-14

31-Dec-13

Cash flows from operating activities

Profit/(loss) for the period (96,996) (289,173) 20,274 (374,105) (78,635) 43,466

Adjustment for:

Depreciation and amortization 11,255 19,054 48,672 72,414 85,374 77,271

Multi-Client amortization 21,000 10,481 56,807 69,274 37,228 16,524

Impairments 24,774 247,373 26,658 315,430 35,110 -

Changes in fair value of financial instruments

1,569 1,401 (13,315) 9,013 13,310 -

Employee share option expenses 141 150 581 505 2,890 2,689

Interest expense 8,825 13,172 32,659 55,055 62,229 76,080

Interest income (17) (41) (93) (799) (779) (204)

Gain on financial restructuring - - (177,787)

Effect of currency (gain)/loss (3,136) (1,099) (620) (4,785) (6,662) (5,306)

Gain on buyback of convertible bonds

- (1,204) - (1,204) (4,096) -

Net movement in provisions 26,356 8,803 30,553

Share of (profit)/loss from joint ventures

- 45 1,220 983 280 265

Working capital adjustments:

Decrease/(Increase) in current assets

21,794 18,211 19,727 22,284 25,597 6,575

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Increase/(Decrease) in trade payables and accruals

1,468 1,432 2,745 3,428 (7,736) (26,092)

Net cash flows from operating activities

(2,582) 28,605 48,082 167,494 157,826 191,268

Cash flows from investing activities


(965) (1,049) (16,387) (15,125) (52,727) (50,368)

Proceeds from sale of assets held for sale

- - - - - 128,003

Proceeds from the disposal of multi-client projects

- 6,714 - 25,197 - -


(12,580) (11,616) (44,649) (96,969) (46,895) (47,927)


- (12,326) (7) (12,439) (13,631) (14,130)

Net cash flows used in investing activities

(13,545) (18,276) (61,042) (99,336) (113,252) 15,578

Cash flows from financing activities

Net receipt from bank loans - - 7,900

Proceeds from the issue of ordinary shares

- - - - 33,631 16

Net proceeds from the issue of senior bonds

- - - - 56,102 93,083

Repayment of bond loans - (777) - (777) (58,734) (115,653)

Receipt from sale lease-back fund - - - - 20,000 -

Repayment of lease liabilities - (1,450) - (7,653) (6,559) (17,009)

Repayment of other long-term debt

(2,303) (1,437) (14,386) (15,144) (30,287) (75,329)

Interest paid (4,250) (7,550) (24,413) (41,632) (51,411) (58,777)

Financial restructuring fees paid - - (6,231) - - -

Other finance costs paid (397) (162) (959) (6,372) (1,023) (7,348)

Decrease/(Increase) in restricted cash

30 12,117 13,788 (6,282) 12,235 (12,365)

Security deposit related to currency swaps

(1,630) (3,480) 4,280 (510) (6,890) -

Interest received 17 41 93 799 779 204

Net cash flows from financing activities

(8,534) (2,697) (28,156) (77,571) (32,156) (193,178)

Effect of foreign currency revaluation on cash

1,168 (59) 872 (2,098) (6,975) 2,550

Net increase in cash and cash equivalents

(23,493) 7,573 (40,245) (11,512) 5,443 16,217

Cash and cash equivalents at the beginning of the period

37,224 46,403 53,976 65,488 60,045 43,828

Cash and cash equivalents at the end of the period

13,731 53,976 13,731 53,976 65,488 60,045

9.2.4 Consolidated statement of changes in equity

For the year ended 31 December 2016

Number of

Shares


Share Premium

Other Reserves

Retained Earnings/(

Loss)

Total Equity



Total comprehensive income/(loss) for the period

- - - 20,274 20,274

Employee stock options

- - 581 - 581

Other movements*

- - (3,272) 3,272 -




Class B shares issued to 350m NOK bondholders




Merger of share classes (on 13-April-2016)

95

Repurchase of Class B shares at USD 0.0013 per share (463,491,579) (603) - - - (603)

New ordinary shares issued at USD 0.20 per share 463,491,579 92,698 (92,096) - - 603

Reduction in nominal value

15 August 2016, from USD 0.20 to USD 0.01 per share

(100,790) 100,790 - - -


*Other movements represent the fair value of employee stock options unexercised and expired during the period.

For the year ended 31 December 2015 – Audited

Number of

Shares


Share Premium

Other Reserves

Retained Earnings/(

Loss)

Total Equity




Employee stock options - - 505 - 505

Other movements (1,098) 1,098 -

Consolidation of share capital

On 22 November 2015 (at 10:1 from USD 0.02 to USD 0.20 per share) (602,832,311) - - - - -




Number of

Shares


Share Premium

Other Reserves

Retained Earnings/(

Loss)

Total Equity





Other movements* - - (8,275) 8,275 -


October 2014 at NOK 1.40 (USD 0.21) per share 162,592,500 3,252 31,639 - - 34,891

Transaction costs on issue of shares - (1,260) - - (1,260)



96


Number of

Shares


Share Premium

Other Reserves

Retained Earnings/(

Loss)

Total Equity



Total comprehensive income for the year - - - 43,466 43,466


Other movements* - - (5,024) 5,024 -


20 March 2013 at NOK 3.58 (USD 0.62) per share 25,000 1 16 - - 17

Balance as of 31 December 2013 507,221,179 10,144 501,843 38,533 (22,942) 527,578

*Other movements represent the equity component of USD 35 million convertible bonds repaid upon maturity on 30 July 2013 (refer to Note 16 and Note 18.1).

No employees have exercised their options. Accordingly, there has not been any increase in shares issued by the Company as a result of employee share options.

9.3 Summary of key financials

In order to measure the Company's performance on a historic basis, the Management has primarily made use of the following measures: EBIT, EBITDA and Prefunding Level. These are Alternative Performance Measures ("APMs") which are provided to give a deeper understanding of the Company's financial performance and which are further defined below and in Section 17 of this Prospectus.

The non-IFRS financial measures presented herein are not recognised measurements of financial performance under IFRS, but are used by Management to monitor and analyse the underlying performance of the Company's business and operations. Investors should not consider any such measures to be an alternative to profit and loss for the period, operating profit for the period or any other measures of performance under generally accepted accounting principles.

The Company believes that the non-IFRS measures presented herein are commonly used by investors in comparing performance between companies. Accordingly, the Company discloses the non-IFRS financial measures presented herein to permit a more complete and comprehensive analysis of its operating performance relative to other companies across periods. Because companies calculate the non-IFRS financial measures presented herein differently, the non-IFRS financial measures presented herein may not be comparable to similarly defined terms or measures used by other companies.

EBIT is short for earnings before interest and tax. It is an important measure for Polarcus as it provides an indication of the profitability of the operating activities. The EBIT margin presented is defined as EBIT divided by net revenues.

EBITDA is short for earnings before interest, tax, depreciation, amortization and impairments. The Company uses EBITDA because it is useful when evaluating operating profitability as it excludes amortization, depreciation and impairments related to investments that occurred in the past.

The Prefunding Level is calculated by dividing the multi-client prefunding revenues by the cash investments in the multiclient library. The Prefunding Level is considered as an important measure as it indicates how the Company’s financial risk is reduced on multi-client investments.

97

A summary of the key financials is shown below:

Unaudited Unaudited

Unaudited Audited

Audited Audited

(In millions of USD) Q4 2016 Q4 2015 31-Dec-16 31-Dec-15 31-Dec-14 31-Dec-13

Revenues 47.2 72.4 243.4 377.5 466.7 532.2

EBITDA (29.0) (0.4) 0.9 142.9 150.1 211.9

EBIT (86.0) (277.3) (131.3) (314.3) (1.3) 118.1

Net profit//(loss) for the period (97.0) (289.2) 20.3 (374,1) (78.6) 43.5

Earnings//(loss) per share (USD) (0.183) (4.317) 0.046 (5.59) (0.15) 0.086

Net cash flows from operating activities (2.6) 28.6 48.1 167.5 157.8 191.3

Total assets (period end) 571.9 848.2 571.9 848.2 1,239.2 1,314.7

Total liabilities (period end) 393.1 736.3 393.1 736.3 753.7 787.7

Total Equity (period end) 178.8 111.9 178.8 111.9 485.5 527.6

PP&E cash investment 1.0 1.0 16.4 15.1 52.7 50.4

Multi-client projects cash investment 12.6 11.6 44.6 97.0 46.9 47.9

Total cash (period end) 14.5 68.5 14.5 68.5 73.7 80.5

Net interest bearing debt (period end) 270.7 588.1 270.7 588.1 609.4 644.3

Equity Ratio 31% 13% 31% 13% 39% 40%

9.4 Segment information

9.4.1 Segment information

The chief operating decision maker of the Group reviews Proprietary Contracts and Multi-client as separate operating segments. As these two segments meet the aggregation criteria as prescribed under IFRS 8 Operating segments, they are combined into one segment called 'Marine'.

Other business activities of the Group including bareboat charter and management services are reported under the 'Other' operating segment. The Group's general administration overheads are also included under 'Other'.

The segment information in the table below is as of 2016.

Quarter ended 31-Dec-16 Unaudited

Quarter ended 31-Dec-15 Unaudited

(In thousands of USD) Marine Other Total

Marine Other Total

Revenues

Proprietary contracts* 28,643 - 28,643

40,969 - 40,969

Multi-Client prefunding 11,048 - 11,048

12,109 - 12,109

Multi-Client late sales 176 - 176

(39) - (39)

Bare boat charter (Operating leases)* - 3,643 3,643

- 5,034 5,034

Management fees* - 3,737 3,737

- 7,900 7,900

Other income (Insurance claims) - - -

- 6,477 6,477

Total Revenues 39,868 7,381 47,248

53,039 19,411 72,450

Operating costs (43,539) (6,333) (49,873)

(54,496) (9,581) (64,077)

Provision for onerous contracts (26,356) - (26,356)

(8,803) - (8,803)

EBITDA (30,027) 1,047 (28,980)

(10,260) 9,830 (431)

Depreciation and amortization (9,300) (1,955) (11,255)

(17,031) (2,023) (19,054)

Multi-Client amortization (21,000) - (21,000)

(10,481) - (10,481)

Impairments (24,774) - (24,774)

(247,373) - (247,373)

Operating profit/(loss) (EBIT) (85,101) (907) (86,008)

(285,145) 7,807 (277,338)

98

Net financial income/(expenses) - (9,338) (9,338)

- (12,362) (12,362)

Profit/(loss) before tax (85,101) (10,245) (95,346)

(285,145) (4,555) (289,700)

Year ended 31-Dec-16 Unaudited

Year ended 31-Dec-15 Audited

(In thousands of USD) Marine Other Total

Marine Other Total

Revenues

Proprietary contracts* 153,821 - 153,821

215,438 - 215,438

Multi-Client prefunding 55,313 - 55,313

83,554 - 83,554

Multi-Client late sales 1,256

1,256

9,265 - 9,265

Bare boat charter (Operating leases)* - 14,426 14,426

- 24,008 24,008

Management fees* - 16,848 16,848

- 31,312 31,312

Other income (Insurance claims) - 1,752 1,752

- 13,895 13,895

Total Revenues 210,390 33,026 243,416

308,257 69,214 377,471

Operating costs (166,467) (29,741) (196,209)

(189,726) (36,096) (225,822)

Provision for onerous contracts (46,356) - (46,356)

(8,803) - (8,803)

EBITDA (2,433) 3,284 851

109,727 33,118 142,845

Depreciation and amortization (40,518) (8,154) (48,672)

(64,139) (8,275) (72,414)

Multi-Client amortization (56,807) - (56,807)

(69,274) - (69,274)

Impairments (26,658) - (26,658)

(315,430) - (315,430)

Operating profit/(loss) (EBIT) (126,416) (4,870) (131,286)

(339,116) 24,843 (314,273)

Net financial income/(expenses) - 154,803 154,803

- (58,738) (58,738)

Profit/(loss) before tax (126,416) 149,933 23,517

(339,116) (33,895) (373,011)

*Disclosed as 'Contract revenue' in the consolidated statement of comprehensi– income.

Year ended 31-Dec-2014 Year ended 31-Dec-2013

Audited Audited

(In thousands of USD) Marine Other Total Marine Other Total

Revenues

Proprietary contracts* 365,866 - 365,866 454,171 - 454,171

Multi-client prefunding 35,102 - 35,102 31,567 - 31,567

Multi-client late sales 9,433 - 9,433 2,182 - 2,182

Bare boat charter (Operating lease)* - 25,368 25,368 - 25,368 25,368

Management fees* - 27,951 27,951 - 16,883 16,883

Other income - 2,989 2,989 - 2,075 2,075

Total Revenues 410,401 56,308 466,709 487,919 44,326 532,245

Operating costs (280,905) (35,677) (316,582) (288,801) (31,557) (320,358)

EBITDA 129,497 20,630 150,127 199,118 12,769 211,887

Depreciation and amortization (70,940) (8,150) (79,090) (69,051) (8,219) (77,271)

Multi-client amortization (37,228) - (37,228) (16,524) - (16,524)

Impairments (35,110) - (35,110) - - -

Operating profit (EBIT) (13,782) 12,480 (1,302) 133,542 4,549 118,091

Net financial expense - (77,091) (77,091) - (74,017) (74,017)

Profit/(loss) before tax (13,782) (64,610) (78,392) 113,542 (69,467) 44,075

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Unaudited Audited


Total assets 490,401 79,123 569,524 746,409 100,527 846,936

Investments in joint ventures - - - 1,220 - 1,220

Cash investments in long-term assets 61,042 - 61,042 124,533 - 124,533


Audited Audited


Total assets 1,089,117 147,835 1,236,953 1,195,910 118,755 1,314,665

Investments in joint ventures 2,203 - 2,203 2,483 - 2,483

Cash investments in long-term assets* 113,252 - 113,252 112,425 - 112,425

9.5 Operating and financial review

As stated in Section 2 "Risk Factors", the Group operates in a cyclical business, with revenues varying in relation to spending on seismic surveys by oil companies. The variations in operating revenues described in Sections 9.5.2 to 9.5.5, below, are within the normal range of variations as a result of the cyclical nature of the business.

9.5.1 Vessel utilization

Q4 2016

Q4 2015

31-Dec-16

31-Dec-15

31-Dec-14

31-Dec-13

Utilization 72% 80% 83% 84% 77% 82%

By category:

Exclusive Seismic Contract* 55% 69% 71% 60% 65% 72%

Multi-Client Seismic Contract 17% 11% 12% 24% 12% 10%

Transit 16% 9% 12% 10% 15% 14%

Yard Stay 3% 2% 2% 1% 3% 3%

Standby 9% 9% 3% 5% 5% 1%

Total 100% 100% 100% 100% 100% 100%

* - Includes the vessel V. Tikhonov which is on Bare Boat charter.

POLARCUS NADIA excluded from vessel utilization subsequent to cold-stacking on 01 April 2015

9.5.2 Development in 2013

9.5.2.1 Operating results

The revenues for the year increased by 1% to USD 532.2 million compared to USD 529.3 million in 2012. Contract revenue was stable at USD 496.4 million in 2013 compared to USD 495.3 million in 2012. Although the sale of POLARCUS SAMUR reduced the fleet size in 2013, when comparing the full year 2013 to 2012 the reduction was partly offset by POLARCUS AMANI and POLARCUS ADIRA being delivered part way through 2012. Net capacity decreased 3% in 2013 compared to 2012. Despite the decreased capacity, contract revenue excluding reimbursables increased 5% to USD 472.7 million in 2013 compared to USD 450.3 million in 2012. Reimburseables refers to items that are part of a proprieatary contract but for which the contractual agreement with the client is that the cost of the item is paid for by Polarcus and then reimbursed, often at no or relatively low mark-up, to the client.

100

Reimburseable items are typically relatively low cost items that are required at the discretion of the client.

Average day rates earned on contract were 13% higher in 2013 compared to 2012. The contract utilization was lower as a consequence of increased transit and yard time as well as an increased multi-client allocation in 2013 compared to 2012.

Reimbursable revenue was abnormally high in 2012 due to having three vessels operating in the arctic.

Multi-client revenue increased by 13% to USD 33.8 million in 2013 from USD 29.8 million in 2012. The fleet allocation to multi-client projects increased to 10% in 2013 compared to 9% in 2012. Multi-client cash investment was USD 47.9 million in 2013 compared to USD 37.7 million in 2012. Multi-client prefunding revenue for the year increased to USD 31.6 million compared to USD 14.7 million in 2012, giving prefunding levels of 66% and 39%, respectively.

Other income decreased in 2013 due to less insurance claims than in 2012.

Vessel operating expenses were USD 303.0 million in 2013.

Gross vessel operating expense capitalized as multi-client increased by 6% to USD 37.9 million in 2013 compared to USD 35.9 million in 2012 as a function of higher multi-client utilization of 10% compared to 9%.

Sales, general and administrative costs were USD 17.4 million in 2013. EBITDA for the year increased 11% to USD 211.9 million compared to USD 190.2 million last year. EBITDA margin increased to 40% in 2013 compared to 36% in 2012.

Depreciation and amortisation was USD 90.3 million in 2013 compared to USD 91.4 million in 2012. The increase was mainly due to the expansion of the fleet and amortization of the multi-client library. An amount of USD 3.5 million was recorded as impairment in 2013, due to damaged in-sea equipment.

For the year 2013, the total interest expense decreased to USD 80.1 million from USD 93.4 million in 2012. The decrease is a function of a reduction in net interest bearing debt and a lower effective interest rate on remaining debt.

Total finance income for 2013 was USD 6.3 million compared to USD 10.1 million in 2012.

In 2013 tax expenses were USD 0.6 million compared to USD 1.9 million in 2012.

The total net profit for 2013 amounted to USD 43.4 million compared to USD 9.8 million for 2012.

9.5.2.2 Balance sheet

As of 31 December 2013, cash and bank amounted to USD 60.0 million excluding restricted cash of USD 20.5 million, compared with USD 43.8 million of cash and bank excluding restricted cash of USD 8.1 million as of 31 December 2012. The Group's net interest bearing debt as of 31 December 2013 amounted to USD 644.3 million compared to USD 749.8 million as of 31 December 2012.

The carrying amount of seismic vessels and equipment was USD 972.8 million as of 31 December 2013, comparable to USD 999.8 million as of 31 December 2012.

The carrying amount of multi-client data library was USD 88.7 million as of 31 December 2013 compared to USD 49.5 million as of 31 December 2012.

9.5.2.3 Cash flow statement

Net cash flow from operating activities was USD 191.3 million in 2013 compared to

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USD 205.6 million in 2012. The main reason for the decrease was a negative change in working capital items in 2013 compared to 2012.

In 2013 the net cash from investing activities was USD 3.2 million compared to a net cash flow of USD -351.5 million in 2012. In 2013 the Company received proceeds of USD 128.0 million following the sale of POLARCUS SAMUR while in 2012 the Company made payments totalling USD 321.6 million for purchases of property, plant and equipment, mainly relating to the delivery of the new vessels POLARCUS AMANI and POLARCUS ADIRA.

Net cash outflow for financing activities was USD 180.8 million in 2013 compared to a net cash inflow of USD 134.3 million in 2012. During 2013 the Company paid back the USD 35 million and the USD 80 million bonds, as well as the remaining USD 40 million tranche relating to POLARCUS SAMUR of the fleet bank facility. New bonds with nominal value of USD 95 million were issued in the year. During 2012 the Company drew down on fleet facility loans in order to pay for the POLARCUS AMANI and POLARCUS ADIRA.

Unrestricted cash held at the end of the 2013 was USD 60.0 million, up from USD 43.8 million at the end of 2012.



The decline in oil prices experience in towards the end of 2014 and consequent cautious spending by oil companies negatively impacted the Company's earnings in the fourth quarter of 2014. The more challenging market environment led to pressure on rates and payment terms.

Revenues decreased by 12% to USD 466.7 million compared to USD 532.2 million in 2013 due to a decrease in contract revenue. Contract revenue decreased by 16% to USD 419.2 million compared to USD 496.4 million in 2013 due to a decrease in proprietary contract revenues.

Proprietary contract revenue decreased by 18% to USD 354.4 million compared to USD 430.4 million in 2013, excluding reimbursables. The number of days on proprietary contract decreased by 14% as a consequence of less contract utilization in 2014 compared to 2013. Average day rates earned on contract were 8% lower in 2014 compared to 2013.

Multi-client revenue was USD 44.5 million in 2014 compared to USD 33.8 million in 2013. The fleet allocation to multi-client projects increased to 12% compared to 10% in 2013. Multi-client cash investment was USD 46.9 million compared to USD 47.9 million in 2013. Multi-client prefunding revenue for the period increased to USD 35.1 million compared to USD 31.6 million in 2013, giving prefunding levels of 75% and 66%, respectively.

Other income of USD 3.0 million in 2014 mainly relates to an insurance claim for damaged in-sea equipment.

The cost of sales decreased by 4% to USD 290.3 million compared to USD 303.0 million in 2013 due to an increase in vessel allocation to multi-client projects resulting in more cost of sales capitalized to multi-client. Excluding reimbursable costs, gross cost of sales decreased by less than 1% to USD 321.8 million compared to USD 322.5 million in 2013.

General and administrative costs were USD 19.8 million, up from USD 17.4 million in 2013, mainly due to a strategic decision to continue further investment in the sales work force, and to continue regional expansion.

A cost of USD 6.6 million was recognized in 2014 due to a bad debt provision relating to one customer.

EBITDA for the year decreased by 29% to USD 150.1 million compared to USD 211.9 million in 2013. EBITDA margin decreased to 32% compared to 40% in 2013.

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Depreciation and amortization increased by 31% to USD 122.6 million compared to USD 93.8 million in 2013. Depreciation amounted to USD 84.4 million compared to USD 80.2 million in 2013. Amortization of the multi-client library was USD 37.2 million, or 84% of multi-client revenue, compared to USD 16.5 million, or 49%, in 2013. Of the total amortization recognized in the year, an amount of USD 3.9 million is recorded as time amortization.

Amortization of other intangible assets increased to USD 5.1 million from USD 1.4 million in 2013 due to the amortization of the worldwide license for patents related to steerable marine seismic streamers and arrays purchased in October 2013. Disposal of onboard equipment is damaged in-sea equipment, the cost of which is partially recovered by the insurance claim recognized as other income in the year.

EBIT (excluding impairments) decreased by 77% to USD 27.5 million compared to USD 118.1 million in 2013 and EBIT margin decreased to 6% compared to 22% in 2013.

Total impairment was USD 28.8 million, compared to nil in 2013. An impairment charge of USD 6.2 million relates to four old Schottel thrusters held as spares that are no longer used by the Company due to malfunctioning of the units, while impairment of the multi-client project library was USD 22.6 million. The impairment of the multi-client project library mainly relates to two projects.

Finance costs increased by 6% to USD 85.3 million, compared to USD 80.1 million in 2013. Net interest expense was USD 60.9 million, compared to USD 68.7 million in 2013.

Finance income increased to USD 21.8 million in 2014 compared to USD 6.3 million in 2013. The increase is due to gain on buyback of convertible bonds and a gain resulting from the reduction in the US dollar value of the bond loans denominated in Norwegian Krone, as a result of depreciation in the currency.

There was a negative change in fair value of financial instruments of USD 13.3 million compared to nil in 2013. The increase is due to a change in the fair value of a cross currency swap that the Company entered into in July 2014 in relation to the NOK 350 million bond. The financial instrument swaps floating rate interest in Norwegian Krone based on a NIBOR rate for a US dollar floating rate liability based on LIBOR, as well as the underlying currencies.

Corporate income tax decreased to USD 0.2 million from USD 0.6 million in 2013.

Net loss was USD 78.6 million compared to a net profit of USD 43.5 million in 2013. The Board proposes that the net loss is allocated to retained earnings.


Net cash flow used in investing activities was USD 113.3 million in 2014 compared to an inflow of USD 15.6 million in 2013. The main reason for the change was that in 2013 the Company received proceeds of USD 128.0 million following the sale of Polarcus Samur. Payments for property, plant and equipment totalled USD 52.7 million in 2014 compared to USD 50.4 million in 2013. Payments for investments in the multi-client library totalled USD 46.9 million in 2014 compared to USD 47.9 million in 2013.

Net cash outflow for financing activities was USD 32.3 million in 2014 compared to USD 193.2 million in 2013. During the year the Company received USD 56.1 million from a bond issue, compared to proceeds of USD 93.1 million from a bond issue the previous year. Repayment of bonds loans during the year totalled USD 58.7 million compared to USD 115.7 million the previous year. Deposits totalling USD 6.9 million were made as cash collateral for currency swaps during the year. Interest paid was USD 51.5 million in 2014 compared to USD 58.8 million in 2013. The reduction is due to reduced net effective interest rate on debt. During the fourth quarter 2014, the Company began addressing the increased liquidity risk caused by the weakening market situation by raising USD 35 million in new equity.

Unrestricted cash held at 31 December 2014 was USD 65.5 million compared to USD 60.0 million at 31 December 2013. Restricted cash held at the end of the year was USD 8.2 million

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compared to USD 20.5 million the prior year. The restricted cash relates to loan instalment retentions and performance guarantees, mainly related to financing and operating activities. Total cash held at 31 December 2014 was USD 73.7 million compared to USD 80.5 million at 31 December 2013.


Gross assets were USD 1,239.2 million at 31 December 2014 compared to USD 1,314.7 million at 31 December 2013. Non-current assets decreased to USD 1,050.7 million at the end of the year compared to USD 1,100.7 million at the end of the 2013. The main reason for the decrease is depreciation of seismic vessels and equipment.

Total current assets were USD 188.4 million at 31 December 2014 compared to USD 213.9 million at 31 December 2013.

Total liabilities were USD 753.7 million at 31 December 2014 compared to USD 787.1 million at 31 December 2013. During the year the Company made full repayment of the remaining nominal value of the NOK 230 million bond. The finance lease relating to Polarcus Naila was increased by USD 20 million, relating to the conversion of the propulsion system and upgrading of the towing capacity of the vessel in the year. The Company issued a NOK 350 million floating rate senior unsecured bond in the year.

Equity decreased to USD 485.5 million at 31 December 2014 compared to USD 527.6 million at 31 December 2013. During the year the Company increased its share capital by USD 34.9 million by an issue of 162,592,500 new Shares. The number of issued Shares at 31 December 2014 was 669,813,679.

9.5.3.4 Emphasis of matter from the 2014 Annual Report

In the Company's Annual Report from 2014, the Company's auditor, Ernst & Young AS, highlighted the Company's evaluation of its going concern assumption at that time, which was disclosed by the Company in the notes to the financial statements. The reason for the Company assessing its going concern assumption at that time as having a material uncertainty was due to a tie-up of working capital, a decline in oil prices creating significant market uncertainty, and the Company needing to secure sufficient backlog in the future. The auditor emphasized the going concern assumption, liquidity risks and loan covenants, as well as the impairment assessment for the Company's vessels and seismic equipment. Based on these factors, as well as the market and financing situation, it was the auditor's opinion that there was an indication of uncertainty regarding the Company's ability to continue as a going concern.

9.5.3.5 Impairment evaluation in the 2014 Annual Report

As of 31 December 2014 the market capitalization of the Company was less than the carrying value of equity, which is an impairment indicator in accordance with IAS 36 Impairment of assets, hence the Company performed an impairment test on the carrying value totalling USD 958 million of the seismic vessels and equipment and the license for steering technology for marine seismic streamers. As a result of the impairment test no impairment was recorded as the recoverable amounts of the assets were higher than their carrying values. The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use.

The fair value less costs to sell of the vessels and seismic equipment, as well as the streamer steering license, at 31 December 2014 was USD 1,074 million, which is USD 116 million higher than their carrying value of USD 958 million. The market values were obtained from two independent valuers and the fair value was calculated as the average of two valuations. Costs to sell were assumed to be 4.1% of the market value, which is the rate of sales costs incurred in the sale of Polarcus Samur in 2013.

Note 4.1.1 to the Company's 2014 Annual Report describes more detail regarding the Company's impairment evaluation in 2014, including sensitivity analysis regarding the impact

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on the impairment evaluation of relatively small changes in assumptions used in the impairment test.



The cautious spending by oil companies continued in 2015 and negatively impacted the Company's earnings. This challenging market environment put pressure on day-rates and payment terms. The Company also implemented cost saving intitatives as further described in 10.5.2.

Revenues decreased 19% to USD 377.5 million in 2015 compared to USD 466.7 million in 2014, due to a decrease in proprietary contract revenue.

Contract revenue decreased by 35% to USD 270.8 million in 2015 compared to USD 419.2 million in 2014. The decrease was mainly driven by lower day rates and having one less vessel in operation. Average day rates earned on contract were 11% lower in 2015 compared to 2014.

Multi-Client revenue was USD 92.9 million in 2015, compared to USD 44.5 million in 2014. The 109% increase was due to an increase in prefunding revenue, driven by a combination of higher prefunding rates and more days spent on Multi-Client projects. The cash investment in Multi-Client was USD 97.0 million in 2015 compared to USD 47.0 million in 2014, resulting a prefunding level for 2015 of 86% compared to 75% in 2014.

Other income of USD 13.9 million in 2015 relates to insurance claims for damaged in-sea equipment.

Cost of sales decreased by 30% to USD 204.3 million in 2015 compared to USD 290.3 million in 2014. The decrease was mainly driven by reduced operating costs of USD 29.0 million in the year due to reduced fleet size following the cold stacking of Polarcus Nadia, as well as lower fuel price and other cost savings. Excluding reimbursable costs, gross cost of sales decreased by 19% to USD 261.0 million in 2015 compared to USD 321.8 million in 2014. A bad debt expense of USD 7.3 million was recorded in 2015, of which USD 6.0 million relates to amounts owed by customers and USD 1.3 million relates to a withholding tax receivable that is no longer recoverable.

A provision for onerous contracts of USD 8.8 million was recognized in 2015 and was recorded in the balance sheet at 31 December 2015. The provision represents the estimated future operating loss for which the Company had a legal or constructive obligation at the balance sheet date of delivering future contracts. The operating costs included in calculating the operating loss include both the vessel operating costs and depreciation.

General and administrative costs were USD 21.5 million in 2015 compared to USD 19.8 million in 2014. One-off legal and professional fees of USD 1.9 million were recorded in 2015 relating to matters associated with the 2016 Restructuring.

EBITDA for the year decreased by 4% to USD 144.8 million compared to USD 150.1 million the previous year. EBITDA margin increased to 38% in 2015 compared to 32% in 2014.

Depreciation and amortization increased by 22% to USD 141.7 million in 2015 compared to USD 116.3 million in 2014. Of this, depreciation amounted to USD 85.7 million in 2015, compared to USD 84.4 million in 2014. Amortization of the Multi-Client library was USD 69.3 million, or 75% of Multi-Client revenue for 2015, compared to USD 37.2 million, or 84%, in 2014.

EBIT (excluding impairments) decreased to USD 3.1 million in 2015 compared to USD 33.8 million in 2014 and EBIT margin decreased to 1% in 2015 compared to 7% in 2014.

Impairment charges increased to USD 315.4 million in 2015 compared to USD 35.1 million in

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2014.

The Group assesses its property, plant & equipment and intangible assets for possible impairment upon the occurrence of impairment indicators. As of 31 December 2015 the market capitalization of the Group was approximately USD 10 million, which was significantly less than the Company's book equity value, which is an impairment indicator in accordance with IAS 36 Impairment of assets. Therefore, the Group performed an impairment test on the carrying value totalling USD 874 million of the seismic vessels and equipment and the license for steering technology for marine seismic streamers. The impairment test based on the Value in Use (VIU) method indicated an impairment of USD 215.6 million on seismic vessels and equipment and USD 26.6 million on streamer steering licenses (total USD 242.2 million).

The Group used the VIU method for the impairment test as the FVLCD (Fair Value Less Costs of Disposal) method is not considered defendable on a standalone basis in the current market which has no observable transactions. The VIU calculation is based on the net present value of future cash flows the Group expects to generate using the assets in their current condition. For further details please see note 4.4.1 of the Annual Report 2015 (http://hugin.info/151377/R/2003456/739508.pdf).

In addition to the USD 242 million impairment recognized in the fourth quarter, during 2015 the Company recorded an impairment of USD 62.1 million as a result of the sale of the majority of its Multi-Client library to TGS in the third quarter. The sale of the majority of its Multi-Client library to TGS was done to provide the Group with additional liquidity to navigate the challenging market environment by monetizing a portion of the asset value while retaining revenue upside from future late sales achieved by TGS.

Equipment with carrying value USD 11.2 million was written off during 2015 following incidents that damaged the equipment beyond repair. As a result of the incidents the Company recognized insurance claim revenue totaling USD 13.9 million in 2015.

Finance costs decreased by 28% to USD 61.1 million in 2015 compared to USD 85.3 million in 2014, mainly as a result of lower realized and unrealized foreign exchange loss and lower interest cost. The net interest expense was USD 53.9 million in 2015 compared to USD 60.9 million in 2014.

Finance income decreased to USD 12.3 million in 2015 compared to USD 21.8 million in 2014. The unrealized exchange gain arising as a result of the reduction in the US dollar value of the bond loan denominated in Norwegian Krone decreased to USD 8.4 million in 2015 compared to USD 15.0 million in 2014.

In 2015 there was a negative change in fair value of financial instruments of USD 9.0 million, down from USD 13.3 million in 2014. This reflects the changes in the fair value of a cross currency swap that the Company entered into in July 2014 in relation to the NOK 350 million bond. The financial instrument swaps floating rate interest in Norwegian Krone based on a NIBOR rate for a US dollar floating rate liability based on LIBOR, as well as a swap of the underlying currencies. The negative change in fair value are to a large extent covered by the unrealized exchange gains recorded in finance income that have arisen in the same periods as a result of the reduction in US dollar value of the bond loan denominated in NOK.

Corporate income tax increased to USD 1.1 million in 2015 compared to USD 0.2 million in 2014.

Net loss, after impairments of USD 315.4 million, was USD 372.2 million in 2015 compared to a net loss, after impairments of USD 35.1 million, of USD 78.6 million in 2014.


Net cash flow from operating activities was USD 167.5 million in 2015 compared to USD 157.8 million in 2014. The main reason for the increase was due to a higher positive change in working capital balances, which increased by USD 7.9 million to USD 25.7 million in


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2015 from USD 17.9 million in 2014.

Net cash flow used in investing activities was USD 99.3 million in 2015 compared to USD 113.3 million in 2014. Payments for property, plant and equipment totaled USD 15.1 million in 2015 compared to USD 52.7 million in 2014. The main reason for the decrease was due to payments for a conversion of the propulsion system and upgrade of the streamer towing capability of Polarcus Naila in 2014. Payments for investments in the Multi-Client library increased to USD 97.0 million in 2015 compared to USD 46.9 million in 2014, due to the increased utilization (to 24% from 12%) in Multi-Client projects, driven largely by the Capreolus project, a large and highly prefunded Multi-Client project offshore Australia. Net cash proceeds of USD 25.2 million were received from TGS in 2015 following the partial divestment of the Company's Multi-Client library.

Net cash flow from financing activities was an outflow of USD 77.6 million in 2015 compared to USD 32.2 million in 2014. The main reason for the increase was that in 2014 there was an equity issue USD 34.9 million, thus reducing the net outflow from financing activities, and the change in restricted cash balance was negative in 2015 compared to positive in 2014. Interest paid was USD 41.6 million in 2015 compared to USD 51.4 million in 2014. Restricted cash deposits increased by USD 6.3 million to USD 14.5 million in 2015 compared to a decrease of USD 12.2 million to USD 8.2 million in 2014.

Unrestricted cash held at 31 December 2015 was USD 54.0 million compared to USD 65.5 million at 31 December 2014. Total cash held at 31 December 2015 was USD 68.5 million compared to USD 73.7 million at 31 December 2014. In addition to the cash balances held, the Company had an undrawn working capital facility of USD 25 million at 31 December 2015.


Gross assets were USD 847.1 million at 31 December 2015 compared to USD 1,239.2 million at 31 December 2014. Non-current assets decreased to USD 686.7 million at the end of the year compared to USD 1,050.7 million at the end of the 2014. The decrease is mainly due to the sale of a portion of the Company's multi-client project library during 2015 and an impairment of USD 242 million relating to the vessels, seismic equipment and intangible assets.

Capital expenditure was USD 19.1 million in 2015 compared to USD 52.1 million in 2014. The capital expenditure in 2014 included the conversion of the propulsion system and upgrade of the streamer towing capability of Polarcus Naila.

Total current assets were USD 161.4 million at 31 December 2015 compared to USD 188.4 million at 31 December 2014.

Total liabilities were USD 733.3 million at 31 December 2015 compared to USD 753.7 million at 31 December 2014.

In December 2015 the Group decided to halt all payments to finance providers due to the, at the time, ongoing 2016 Restructuring. As of 31 December 2015 the Group was thus in default of on several of its loan agreements due to cross defaults provisions in the loan agreements. Therefore, the outstanding liability under these agreements was classified as 'Current liabilities' in the consolidated statement of financial position as of 31 December 2015. Total current liabilities were USD 713.3m at 31 December 2015 compared to USD 112.0 million at 31 December 2014. Total non-current liabilities were USD 23.0m at 31 December 2015 compared to USD 641.6 million at 31 December 2014.

Equity decreased to USD 111.9 million at 31 December 2015 compared to USD 485.5 million at 31 December 2014.

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The fourth quarter financial results reflect a challenging seismic market resulting in fleet utilization significantly weaker than the utilization reported by the Company in recent quarters. Total utilization was 72% in Q4 2016. Revenues in the quarter were USD 47.2 million. The quarter saw increased standby time following delays in clients obtaining permits on certain projects and vessel repositioning after strong utilization in the prior quarter. Vessel allocation to Multi-Client was 17%, and related Multi-Client prefunding revenue was USD 11.0 million. While prefunding levels remained comparatively high, Multi-Client prefunding revenue for the quarter was less than expected due to production delays on the Company's Multi-Client project in Brazil following poor weather and extreme barnacle growth on in-sea equipment. The prefunding level was 87% in the quarter and 124% for the full year.

Gross cost of sales was USD 52.6 million. General and administrative costs were USD 4.2 million

The prolonged weak market conditions led the Company to recognize a USD 24.8 million non-cash impairment charge on the carrying values of the vessels and seismic equipment, as well as a non-cash onerous contract provision of USD 26.4 million in the quarter. A total of USD 9.5 million of the impairment charge relates to equipment owned by Polarcus Nadia and USD 22.4 million of the onerous contract provision relates to the operating lease for the same vessel. As the timing of the reactivation of Polarcus Nadia from lay up is uncertain, the Company has applied a careful approach in assessing the accounting for these items. If Polarcus Nadia is reactivated before the end of the operating lease term, any remaining onerous contract provision related to the operating lease is expected to be credited to the income statement.

The lower earnings resulted in net cash outflow of USD 23.5 million during the quarter. The total cash at the quarter end amounted to USD 14.5 million, comprising USD 13.7 million unrestricted cash and USD 0.7 million restricted cash. The net interest bearing debt amounted to USD 270.7 million, up from USD 247.9 million at the start of the quarter, due to a lower cash balance at the quarter end.

The Company secured eight new contract awards since the end of the last quarter. One of the awards is a multi-year contract award with TGS-NOPEC Geophysical Company ASA ("TGS") to acquire 30,000 km² of 3D data, requiring approximately 15 vessel months. Approximately 20,000 km² will be acquired in 2017 utilizing Polarcus' innovative Xarray™ multiple source acquisition method. The remaining approximately 10,000 km² will be acquired in 2018.


2016

Revenues decreased 36% to USD 243.4 million in 2016 compared to USD 377.5 million in 2015, due to a decrease in contract and Multi-Client revenue.

Contract revenue decreased by 32% to USD 185.1 million in 2016 compared to USD 270.9 million in 2015. The decrease was driven by lower day rates on proprietary contract, and a reduction in bareboat charter and management fees.

Multi-Client revenue was USD 56.6 million in 2016, compared to USD 92.8 million in 2015. The 39% decrease was due to decrease in prefunding revenue and late sales. The cash investment in Multi-Client was USD 44.6 million in 2016 compared to USD 97.0 million in 2015, resulting in a prefunding level for 2016 of 124% compared to 86% in 2015.

Other income was USD 1.8 million compared to USD 13.9 million in 2015 due to less income from insurance claims for damaged in-sea equipment.

Cost of sales decreased by 13% to USD 176.9 million in 2016 compared to USD 204.3 million in 2015. Gross cost of sales decreased by 15% to USD 221.7 million in 2016 compared to USD 262.3 million in 2015. The reduction in gross cost of sales is mainly due to continued

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cost management focus, as well as a reduction in project specific fees and a reduction in the fleet size by one vessel from 01 April 2015. The significant cost reduction is achieved despite an additional gross cost of sales expense of USD 16 million in 2016 due to the operating lease reclassification from Q1 2016 relating to Polarcus Nadia and Polarcus Naila.

A provision for onerous contracts totalling USD 26.4 million was recognized in Q4 2016, of which USD 22.4 million was an increase in the provision booked relating to the operating lease for Polarcus Nadia. The reason for the provision is the uncertainty of the timing of when and if the vessel will be reactivated from cold stacking. At 31 December 2016, the total provision in the balance sheet relating to the operating lease for Polarcus Nadia is USD 40.2 million, an amount that represents the net present value of the remaining estimated cost to the Company during the fixed lease period. A provision for onerous contracts of USD 3.9 million was recognized in the quarter, representing the estimated future operating loss for which the Company had a legal or constructive obligation at the balance sheet date of delivering seismic acquisition contracts in the future. The operating costs included in calculating the operating loss include both vessel operating costs and depreciation.

General and administrative costs were USD 19.4 million in 2016 compared to USD 21.5 million in 2015.

EBITDA for the year decreased to USD 0.9 million compared to USD 142.8 million the previous year.

Depreciation and amortization decreased by 33% to USD 48.7 million in 2016 compared to USD 72.4 million in 2015. Of this, depreciation amounted to USD 53.0 million in 2016, compared to USD 85.4 million in 2015. The reduction in depreciation is due to a lower vessel depreciation base following the impairment charge recognized in Q4 2015, as well as two less vessels subject to depreciation in 2016 compared to the previous year due to the reclassification of Polarcus Naila and Polarcus Naida from finance lease to operating lease in Q1 2016.

Amortization of the Multi-Client library was USD 56.8 million, or 100% of Multi-Client revenue for 2016, compared to USD 69.3 million, or 75%, in 2015.

EBIT was negative USD 131.3 million in 2016 compared to negative USD 314.3 million in 2015.

Impairment charges decreased to USD 26.7 million in 2016 compared to USD 315.4 million in 2015.

Impairment charges totalling USD 24.8 million were recognized in 2016, of which USD 9.5 million was in relation to the cold stacked vessel Polarcus Nadia. As the timing of the reactivation of Polarcus Nadia from lay up is uncertain, the Company has applied a careful approach and impaired the pre-fabricated twin-fin which had a carrying value of USD 7.0 million, as well as other equipment totalling USD 2.5 million. Before Polarcus Nadia can be reactivated, the pre-fabricated twin-fin would need to be installed on the vessel and the remainder of the propulsion upgrade completed.

Finance costs decreased by 39% to USD 37.0 million in 2016 compared to USD 61.1 million in 2015 dueto lower interest bearing debt following the 2016 Restructuring which the Company completed in Q1 2016.

In 2016 the Company recorded a USD 13.6 million fair value gain on revaluation of financial instruments, up from a loss of USD 9.0 million in 2015. The gain is mainly due to a gain on revaluation of bonds that are booked at fair value through profit and loss following the completion of the 2016 Restructuring.

The Company recorded a gain of USD 177.8 million in 2016, being the accounting gain following completion of the 2016 Restructuring. USD 38.6 million of the gain is a result of reclassification of the finance leases relating to Polarcus Nadia and Polarcus Naila, while USD 139.2 million is a result of derecognition from the balance sheet of the Company's pre-

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restructured bond loans and recognition of new bond loan financial liabilities at fair value.

Corporate income tax increased to USD 3.2 million in 2016 compared to USD 1.1 million in 2015.

Net profit was USD 20.3 million in 2016 compared to a net loss, after impairments of USD 315.4 million, of USD 374.1 million in 2015.

Q4 2016

Revenues decreased by 35% to USD 47.3 million, (Q4 2015 – USD 72.5 million), driven by a decrease in contract revenue. Q4 2016 contract revenue decreased by 33% to USD 36.0 million (Q4 2015 – USD 53.8 million) mainly due to a decrease in proprietary contract revenue and management fees.

Proprietary contract revenue decreased by 29% to USD 27.1 million (Q4 2015 – USD 38.4 million). The revenue decrease was driven by fewer days spent on proprietary contracts.

Multi-Client revenue decreased by 7% to USD 11.2 million (Q4 2015 – USD 12.1million). Multi-Client cash investment increased to USD 12.6 million (Q4 2015 – USD 11.6 million). The prefunding level of 87% for the quarter (Q4 2015 – 104%) was lower than expected due to production delays on the Company's Multi-Client project in Brazil following poor weather and extreme barnacle growth on in-sea equipment. The prefunding level for the full year was 124%, up from 86% the prior year.

Net cost of sales decreased by 22% to USD 45.6 million (Q4 2015 – USD 58.1 million), mainly due to a decrease in gross cost of sales and an increase in operating costs capitalized to Multi-Client projects as a result of an increase in fleet allocation to Multi-Client. Gross cost of sales decreased by 10% to USD 52.6 million (Q4 2015 – USD 58.6 million). A bad debt expense of USD 2.6 million (Q4 2015 – USD 6.6 million) was recognized in the quarter relating to amounts owed by customers for which recoverability is uncertain.

General and administrative costs decreased by 28% to USD 4.3 million (Q4 2015 – USD 6.0 million).

A provision for onerous contracts totalling USD 26.4 million was recognized in the quarter, of which USD 22.4 million was an increase in the provision booked relating to the operating lease for Polarcus Nadia. The reason for the provision is the uncertainty of the timing of when and if the vessel will be reactivated from cold stacking. At 31 December 2016, the total provision in the balance sheet relating to the operating lease for Polarcus Nadia is USD 40.2 million, an amount that represents the net present value of the remaining estimated cost to the Company during the fixed lease period. A provision for onerous contracts of USD 3.9 million was recognized in the quarter, representing the estimated future operating loss for which the Company had a legal or constructive obligation at the balance sheet date of delivering seismic acquisition contracts in the future. The operating costs included in calculating the operating loss include both vessel operating costs and depreciation.

EBITDA decreased to negative USD 29.0 million (Q4 2015 – negative USD 0.4 million). EBITDA adjusted for non-recurring items decreased to negative USD 2.6 million (Q3 2015 – positive USD 8.4 million).

Depreciation and amortization decreased by 41% to USD 11.3 million (Q4 2015 – USD 10.5 million), due to a lower depreciation base as the result of impairents recognized in Q4 2015 and the less depreciable assets for the majority of 2016 follwoing the declassification of POLARCUS NAILA and POLARCUS NADIA from the balance sheet in Q1 2016..

Amortization of the Multi-Client library increased by 100% to USD 21.0 million (Q4 2015 – USD 10.5 million), driven by increased Multi-Client utilization and the impact of the straight line amortization period. The consolidated amortization rate increased to 187% of Multi-Client revenue, driven by an increase in straight line amortization and a high amortization rate applied on one highly prefunded project in progress in Brazil.

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During the quarter the Company continued to acquire a Multi-Client project in Brazil. The Project is a converted contract with limited late sales potential, hence, the Company has chosen to amortize the full cost of acquiring the project during the quarter. Production on the project was negatively impacted by extraordinary operating conditions during the quarter, including weather and extreme barnacle growth on in-sea equipment, which increased the cost of the project while delaying revenue generation. Straight line amortization increased in the fourth quarter as it was the first quarter with full straight line amortization charges for two of the Company's shelf projects. The straight line amortization of those Multi-Client projects is in accordance with the amendment in IAS 38 regarding amortization of intangible assets which came into effect 1 January 2016.

Impairment charges totalling USD 24.8 million were recognized in the quarter (Q4 2015 – USD 247.4 million), of which USD 9.5 million was in relation to the cold stacked vessel Polarcus Nadia. As the timing of the reactivation of Polarcus Nadia from lay up is uncertain, the Company has applied a careful approach and impaired the pre-fabricated twin-fin which had a carrying value of USD 7.0 million, as well as other equipment totalling USD 2.5 million. Before Polarcus Nadia can be reactivated, the pre-fabricated twin-fin would need to be installed on the vessel and the remainder of the propulsion upgrade completed.

EBIT recorded in the quarter was a loss of USD 86.0 million (Q4 2015 – loss of USD 277.3 million). EBIT adjusted for non-recurring items decreased to negative USD 34.9 million (Q4 2015 – negative USD 21.2 million).

There was a negative change in fair value of financial instruments of USD 1.6 million during the quarter (Q4 2015 – positive USD 1.4 million). The fair value loss was mainly due to a negative change of USD 1.8 million (Q4 2015 – positive 1.4 million) in the fair value of a cross currency swap financial instrument that swaps floating rate interest in Norwegian Krone based on a NIBOR rate for a US dollar floating rate liability based on LIBOR, as well as the underlying currencies. A fair value gain of USD 0.2 million (Q4 2015 – nil) arose on the change in fair value of the unsecured bonds that are accounted for at fair value through profit or loss.

Net loss decreased to USD 97.0 million (Q4 2015 – loss USD 277.3 million).

Basic and diluted earnings per share decreased to a loss of USD 0.183 (Q4 2015 – loss of USD 4.3 per share).

9.5.5.2 Reclassification of Fleet Bank Facility loan

During Q4 2016, the Company received a reset of the Debt Service Ratio ("DSR") to 0.75 from 1.25 (the "Waiver"). Due to wording included with the Waiver, a strict interpretation of IAS 1.69 requires that the Fleet Bank Facility be temporarily reclassified as a current liability at 31 December 2016 as the interpretation is that the Company did not have an unconditional right to defer payment for 12 months at that date. The Fleet Bank Facility is expected to be reclassified as a non-current liability in Q1 2017. The Company was not in default of the DSR covenant or any other covenant in any of its financing arrangements during Q4 2016.

9.5.5.3 Capital expenditure

Capital expenditure increased to USD 1.1 million (Q4 2015 – USD 1.1 million). The expenditure in the quarter was mainly related to mandatory vessel classification surveys.


2016 Net cash flow from operating activities was USD 48.1 million in 2016 compared to USD 167.5 million in 2015. The decrease is mainly driven by the lower revenue of USD 134.1 million recorded in 2016 compared to the prior year.

Net cash flow used in investing activities was USD 61.0 million in 2016 compared to USD 99.3

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million in 2015. Payments for property, plant and equipment totaled USD 16.4 million in 2016 compared to USD 15.1 million in 2015. Payments for investments in the Multi-Client library decreased to USD 44.7 million in 2016 compared to USD 97.0 million in 2015, mainly due to a reduction in the vessel allocation to Multi-Client projects from 24% the prior year to 12% in 2016.

Net cash flow from financing activities was an outflow of USD 28.2 million in 2016 compared to USD 77.6 million in 2015. Interest paid was USD 24.4 million in 2016 compared to USD 41.6 million in 2015, the reduction due to lower interest bearing debt following the 2016 Restructuring. Net proceeds of USD 7.9 million were received in the year following an USD 8.0 million bank loan to finance purchase of in-sea seismic equipment. Restricted cash deposits decreased by USD 13.8 million in 2016 to negative USD 6.3 million in 2015.

During the year, the Company extinguished 50% of the Swap at fair value by making a payment of USD 6.7 million from restricted cash which was deposited as collateral for the Swap and USD 1.6 million from the cash collateral the Company had previously deposited with the issuer of the Swap. The impact of the buyback on the Company's free cash balance was nil, and the reduction in the Swap reduces the Company's exposure to financial risk arising from possible future changes in the market value of the Swap. The Swap was entered into in July 2014 in relation to the NOK 350 million bond. The reduction aligns the Swap with the underlying liability after the 2016 Restructuring of the NOK 350 million bond in Q1 2016.

Unrestricted cash held at 31 December 2016 was USD 13.7 million compared to USD 54.0 million at 31 December 2015. In addition to the cash balance held, the Company has an undrawn working capital facility of USD 25 million at 31 December 2016.

Q4 2016 Net cash flow from operating activities decreased to an outflow of USD 2.6 million (Q4 2015 – inflow USD 28.6 million), due to lower operating profits and a reduction in positive working capital movements between quarters. The net positive working capital movement in the quarter decreased to USD 3.6 million (Q4 2015 – USD 19.6 million).

Net cash flow used in investing activities decreased to USD 13.6 million (Q4 2015 – USD 18.3 million), mainly due to a decrease in investment in intangible assets. Payments for investments in the Multi-Client library increased to USD 12.6 million (Q4 2015 – USD 11.6 million) due to increased Multi-Client vessel allocation.

Net cash flow from financing activities was an outflow of USD 8.5 million (Q4 2015 – USD 2.7 million). Interest paid decreased to USD 4.3 million (Q4 2015 – USD 7.6 million) and repayment of debt decreased to USD 2.3 million (Q4 2015 – USD 3.7 million). Net negative cash movement relating to currency swaps was USD 1.6 million (Q4 2015 – USD 3.5 million).

Unrestricted cash held at the quarter end was USD 13.7 million (Q4 2015 – USD 54.0 million). Total cash held at the quarter end was USD 14.5 million (Q4 2015 – USD 68.4 million), including restricted cash of USD 0.7 million (Q4 2015 – USD 14.5 million). The Company's working capital facility of USD 25.0 million was undrawn at the quarter end.

9.5.5.5 Lease arrangement for POLARCUS NADIA and POLARCUS NAILA

The charter rates for the vessels POLARCUS NADIA and POLARCUS NAILA were reduced by approximately 75% from the levels prior to the 2016 Restructuring until 1 January 2019, after which the charter rates increase to a rate representing a reduction of approximately 20% from the pre-restructured levels. The purchase options were removed from the sale-leaseback agreements, while the charter periods were extended by three years until 2022.

As a result of the changes in lease terms, the arrangements no longer meet the definition of a finance lease and were therefore reclassified from financial leases to operational leases in Q1 2016. The reclassification resulted in the derecognition of the financial lease liability of USD 166 million and the carrying value of the vessels of USD 127 million from the Company's consolidated statement of financial position, leading to an accounting gain of USD 39 million

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on reclassification. At the same time, a provision for onerous contracts of USD 20 million was recognized in Q1 2016, representing the estimated future loss as a result of the operating lease commitment. A main cause of the estimated loss is the period that POLARCUS NADIA is expected to be cold-stacked, during which time she will not be generating revenues. During the nine months to end Q3 2016, a total of USD 7 million of the provision was released to the income statememt. In Q4 2016, an updated assessment of the timing of POLARCUS NADIA's reactivation was made and a further USD 22.4 million was recognized as a provision for onerous contract for the lease of the vessel. The reason for the provision is the uncertainty of the timing of when and if the vessel will be reactivated from cold stacking. At 31 December 2016, the total provision in the balance sheet relating to the operating lease for POLARCUS NADIA is USD 40.2 million, an amount that represents the net present value of the remaining estimated cost to the Company during the fixed lease period.

The operating lease is accounted for by recognizing the total lease commitments of USD 96 million evenly in the income statement on a straight-line basis over the lease term. The difference between amounts expensed in the income statement and the payments made will be recognized as an accrued liability in the statement of financial position. Under this method of accounting, the operating lease expenses in the income statement in 2016 and 2017 would be USD 20 million more than the cash paid by the Company. This difference will be significantly offset by the unwinding of the onerous contracts provision of USD 20 million.


Gross assets decreased by USD 276.3 million to USD 571.9 million at 31 December 2016 compared to USD 847.1 million at 31 December 2015. The decreased was due to a decrease in non-current assets of USD 198.2 million and a decrease in current assets of USD 78.0 million.

Non-current assets decreased to USD 488.5 million at the end of the year compared to USD 686.7 million at the end of the year compared to USD 1,050.7 million at the end of the 20142015. The decrease is mainly due to the reclassification from finance lease to operating of two of the Company’s vessels – POLARCUS NAILA and POLARCUS NADIA - in Q1 2016 as part of the Company’s financial restructuring.

Total current assets decreased by 78.0 million to USD 83.4 million at 31 December 2016 compared to USD 161.4 million 31 December 2015. The decrease was due to a decrease in all current asset catgeories, largely as a result of lower operating earnings. Receivables from customers decreased USD 11.2 million to USD 47.6 million from USD 58.8 million, while other current assets decreased by USD 12.8 million to USD 21.3 million from USD 34.2 million. Total cash (ie. including restricted cash) decreased by USD 54.0 million to USD 14.5 million at 31 December 2016 to USD 68.5 million at 31 December 2015.

Total liabilities decreased by USD 340.2 million to USD 393.1 million at 31 December 2016 compared to USD 733.3 million at 31 December 2015. The decrease was mainly due to the financial restructuring the Company completed in Q1 2016, which resulted in a reduction in the carrying value of the Company's debt by USD 351 million in the quarter of completion, due to the renogotiated lease terms for POLARCUS NAILA and POLARCUS NADIA, as well amendments to the bond loans.

Total current liabilities decreased by USD 403.5 million to USD 309.8 million at 31 December 2016 compared to USD 713.3 million at 31 December 2015, mainly as a result of the change in carrying values of the finance leases and bond loans due to the financial restructuring. Total non-current liabilities increased by USD 60.3 million to USD 83.3 million at 31 December 2016 compared to USD 23.0 million at 31 December 2015, mainly due to recognition of a long-term provision in 2016 as a result of the onerous operating lease contract for POLARCUS NADIA.

Equity increased by USD 66.9 million to USD 178.8 million at 31 December 2016 compared to USD 111.9 million at 31 December 2015. The increase was due to the net profit of USD 20.3 million recognized in 2016, and an increase in share capital of USD 46.1 million in the year as

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a result of equity issued to certain bondholders during the Company’s financial restructuring in Q1 2016.

9.6 Significant changes in financial and trading position after 31 December 2016 and trend information

Other than the Private Placement, the Offering,the bareboat charterparty described in Section 8.8.9 and the 2017 Amendments, there has been no significant change in the Group's financial or trading position, nor significant industry trends, since 31 December 2016.

9.7 Investments

9.7.1 Principal investments up to 31 December 2016

Q4 2016 Q4 2015 2016 2015 2014 2013

(In USD thousands) Unaudited Unaudited Unaudited Audited Audited Audited


(965) (1,049) (16,387) (15,125) (52,727) (50,368)


(12,580) (11,616) (44,649) (96,969) (46,895) (47,927)


- (12,326) (7) (12,439) (13,631) (14,130)

Total investments (13,545) (24,990) (61,042) (124,533) (113,253) (112,425)

Proceeds from assets sale

6,714 - 25,197 - 128,003

Polarcus invested a total of USD 112.4 million in 2013, USD 113.3 million in 2014, USD 124.5 million in 2015, USD 61.0 million in 2016 and USD 13.5 million in Q4 2016.

The Company does not report investments by geographical area. As further described in Section 8.3 "Business—Overview of business activities", the Company's operations are characterised by short-term contracts from one to six months, with potential for seasonal and multi-year contract terms in some cases, and projects are typically awarded one to four months prior to commencement. Hence, the Company's vessels' geographic position will change relatively often.

Investments in property, plant and equipment

In 2013, Polarcus invested USD 50.4 million in Property, plant and equipment comprising USD 6.8 million of capital expenditure related to maintenance of seismic and maritime equipment, and USD 43.6 million related to upgrades and new seismic equipment.

In 2014, the investments in Property, plant and equipment amounted to USD 52.7 million comprising USD 27.4 million for propulsion conversion and upgrade of streamer towing capability of POLARCUS NAILA and USD 25.3 million of capital expenditure related to maintenance of seismic and maritime equipment.

In 2015, the investments in Property, plant and equipment amounted to USD 15.1 comprising USD 12.0 million for propulsion conversion and upgrade of streamer towing capability of POLARCUS NADIA and USD 3.1 million of capital expenditure related to maintenance of seismic and maritime equipment.

In 2016, the "Payments for property, plant and equipment" totalled USD 16.4 million which included mainly a full in-sea seismic equipment set, a five year classification survey for POLARCUS ALIMA and an intermediate classification survey for POLARCUS NAILA.

The Group has not made any significant principal investments in the period from 31 December 2016 to the date of this Prospectus.

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Investments in Multi-Client projects

In 2013, Polarcus invested USD 48 million in Multi-Client projects comprising USD 13 million in two projects offshore West Africa and USD 35 million in four projects offshore UK. All the projects invested in by the Company in 2013 were divested in 2015.

In 2014, Polarcus invested USD 47 million in Multi-Client projects comprising USD 12 million in two projects offshore West Africa, USD 12 million in two projects offshore Ireland and USD 23 million in four projects offshore UK. All the projects invested in by the Company in 2014 were divested in 2015.

In 2015, Polarcus invested USD 97 million in Multi-Client projects. Of this investment USD 13 million was invested in five projects which were later in the year divested comprising USD 9 million in two projects offshore West Africa, USD 2 million in two projects offshore Ireland and USD 2 million in a projects offshore UK. Polarcus also invested USD 77 million in two projects offshore Western Australia and USD 7 million in one project offshore West Africa which were not divested.

In 2016, Polarcus invested USD 45 million in multi-client projects comprising USD 29 million in two projects offshore Brazil, USD 15 million in two projects offshore Australia, and USD 1 million in a project offshore Gambia.

Investments in intangible assets

Polarcus invested a total of USD 40.2 million in intangible assets in the three-year period from 2013 to 2015, of which USD 14.1 million was paid in 2015, USD 13.6 million in 2014 and 12.4 million in 2015. Of this, a total of USD 40.0 million relates to the acquisition in 2013 of a USD 40 million worldwide license for WesternGeco patents relating to steering seismic streamers and arrays, payable over three years from 2013 to 2015.

Sale of assets

In 2013, Polarcus sold one of its vessels, POLARCUS SAMUR, which generated cash flow of USD 128 million.

In 2015, Polarcus divested a portion of its multi-client library by selling its North West Europe and West Africa multi-client library which generated cash flow of USD 25.2 million.

9.7.2 Future commitments and investments as of the date of this Prospectus

At the date of this Prospectus, the Group has not made any significant commitments to future principal investment in its ordinary course of business.

The Group expects to make additional Multi-Client investments of approximately USD 20 million in 2017 with an aggregated prefunding level above 100%.

The Company expects to make additional investments in property, plant and equipment of approximately USD 15 million in 2017, including two 5-year classification surveys.

9.8 Summary of financing

The rapid decline in oil prices and consequent cautious spending by oil companies has negatively impacted the Company's earnings since the second half of 2014. The Company started to address the reduced earnings in Q4 2014 by implementing a cost management program. This reduced the Company's costs to a level where the operations are cash positive before debt service. However, despite extensive initiatives by the Company, the old (ie. Pre-restructured) debt service was not sustainable and in February 2016 the Company implemented a restructuring of its debt (the "2016 Restructuring"). Under the 2016 Restructuring, debt service payments during 2016 and 2017 were reduced by approximately USD 140 million.

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The prolonged industry downturn has impacted the seismic services segment and the Company's liquidity. As part of the Private Placement and for the purpose of strenghtening the Company's liquidity, the Company has come to an agreement with the lenders under the Fleet Bank Facility on an extended amoritsation freeze until 1 January 2019 and certain reductions in the financial covenants under the Fleet Bank Facility as well as an amendment to the minimum equity ratio in the Unsecured Bonds (the "2017 Amendments"). The 2017 Amendments and the Private Placement are expected to provide the Company with sufficient liquidity to operate even if the market pricing remains at the current low levels into Q1 2018, after which time the Company is reliant upon an improvement in market conditions.

9.8.1 Summary of financing

As of 31 December 2016 the Company had the following debt facilities:

Debt Security Original Size Outstanding Maturity

Interest up to 30 Jun 2018

Interest from 1 July 2018

Senior bond – Tranche A Unsecured

NOK 350m NOK 78m Dec-22 0% 3.5% to

5.0%¹ Senior bond – Tranche B Unsecured NOK 271m Dec-22 0% 2.5% to

3.6%¹ Senior bond – Tranche A Unsecured

USD 95m USD 17m Dec-22 0% 3.5% to

5.0%¹ Senior bond – Tranche B Unsecured USD 69m Dec-22 0% 2.5% to

3.6%¹ Convertible bond – Tranche A Selma

USD 125m

USD 71m Mar-22 5.60% 5.60%

Convertible bond – Tranche B1 Unsecured USD 10m Dec-22 0% 3.5% to

5.0%¹ Convertible bond – Tranche B2 Unsecured USD 21m Dec-22 0% 2.5% to

3.6%¹

Fleet bank facility Tranche 1 Asima USD 80m USD 49m Aug-22 6.20%

6.68% (fixed) & 2.75% + LIBOR²

Fleet bank facility Tranche 2 Alima USD 55m USD 36m Mar-23 3.95%

2.75% + LIBOR

Fleet bank facility Tranche 3 Amani USD 114m USD 84m Mar-24 5.60%

5.60% (fixed)

Fleet bank facility Tranche 4 Adira USD 114m USD 86m Jun-24 5.60%

5.60% (fixed)

Vendor financing Streamers USD 9.6m USD 3.7 Apr-17 1.81%

Streamer loan Streamers USD 8m USD 8m Latest Feb-18

LIBOR +5%

1 Annual stepped increase from 1 July 2018 to maturity in 2022

2 Interest is fixed at 6.68% on 70% of the loan and 2.75% + LIBOR on 30% of the loan

The following tables show the revised maturity profile of the Group's financial liabilities based on contractual payments following completion of the 2017 Amendments. The amounts disclosed in the tables are undiscounted cash flows.

(In thousands of USD) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Total

Repayment Fleet Bank Facility - - - - -

Interest payments Fleet Bank Facility 3,913 3,064 3,964 3,044 13,985

Repayment Bond loans - - - - -

Interest payments Bond loans 999 999 999 999 3,994

Repayment liability for seismic equipment 1,895 1,502 1,333 1,333 6,063

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Interest payments for seismic equipment liability

93 71 50 28 242

Operating lease payments 1,575 1,593 1,610 1,610 6,388

Accounts payable 18,929 - - - 18,929

Other payables 27,303 - - - 27,303

Total 54,706 7,228 7,956 7,014 76,904

(In thousands of USD) 2017 2018 2019 – 2021 2022 onwards Total

Repayment Fleet Bank Facility - - 90,862 163,420 254,282

Interest payments Fleet Bank Facility 13,985 13,417 30,307 12,115 69,8247

Repayment Bond loans - 5,706 17,119 204,536 227,362

Interest payments Bond loans 3,994 3,875 32,742 15,430 56,042

Repayment liability for seismic equipment 6,063 889 - - 6,952

Interest payments for seismic equipment liability 242 7 - - 249

Operating lease payments 6,388 6,388 63,787 18,638 95,200

Accounts payable 18,929 - - - 18,929

Other payables 27,303 - - - 27,303

Total 76,904 30,281 234,818 414,140 756,143

The contractual payments in the above maturity table assume the call options on the Senior and Convertible bonds are not called by the Company. The Company has call options ranging from 33% to 50% of par value for A Bonds of the Unsecured bonds and B1 Tranches of the Convertible bonds, while the call options range from 24% to 36% for B Bonds of the Unsecured bonds and B2 Tranches of the Convertible bonds. The call option is dependent on which year the Company calls the bonds. The blended call option for all tranches in 2018 is 27% of par value. If the Company calls the options, the principal repayments it will be required to make will be significantly lower than the amounts shown in the above maturity table.

The Company expects to be able to generate enough cash from its operations to meet its financial liabilities as they fall due. The 2017 Amendments and the Private Placement are expected to provide the Company with sufficient liquidity to operate in the event that market pricing and vessel utilisation remain at current levels into Q1, 2018, after which time the Company is reliant on an improvement in market conditions. In the event that pricing falls further, utilisation cannot be maintained or current prices continue later into 2018, the Company may have to secure additional financing.

9.8.2 USD 410 million Fleet Bank Facility

In October 2011, Polarcus announced that the Group had entered into a loan agreement for a bank facility of USD 410 million (the "Fleet Bank Facility") with Eksportfinans ASA as lender and with DNB Bank ASA and DVB Bank SE, Nordic Branch, together with Garanti-instituttet for Eksportkreditt ("GIEK") as guarantors. The Fleet Bank Facility includes 4 tranches related to POLARCUS ALIMA, POLARCUS ASIMA, POLARCUS AMANI and POLARCUS ADIRA. The facility did originally also include a tranche for POLARCUS SAMUR, but that was repaid when the vessel was sold.

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Tranches 3 and 4 have later been transferred to the Ministry of Industry and Trade as lender.

The interest rates for the different tranches are summarized below.

Bank debt Original size (USDm)

Balance as of 31 December 2016 (USDm)

Interest and guarantee commission

Tranche 1 80 USD 49m 6.68% (fixed) & 2.75% + LIBOR

Tranche 2 55 USD 36m 2.75% + LIBOR

Tranche 3 114 USD 84m 5.60%

Tranche 4 114 USD 86m 5.60%

Total 363 255

Each of the tranches of the Fleet Bank Facility shall be repaid in equal semi-annual instalments calculated from the date of delivery of each vessel.

The Fleet Bank Facility has a 12 year maturity profile, with amortisation freeze in the period from 1 November 2015 to 1 January 2019 (extended from 1 January 2018 in connection with the 2017 Amendments).

The commercial banks have guaranteed 20% of the total facility amount while GIEK has guaranteed 80% of the total loan amount. The guarantees issued by the commercial banks mature June 2022. At this time, bank guarantees must be extended/replaced, otherwise the remaining 80% of the Fleet Bank Facility guaranteed by GIEK matures.

The Fleet Bank Facility has a security package as follows:

First priority cross-collateralised mortgages in the four vessels;

First priority assignment of earnings related to the vessels on a floating charge basis;

First priority pledge of earnings accounts and retention accounts of the vessel owners;

First priority assignment of all vessel insurances in all vessels.

First priority share pledge in the shares of the vessel owning companies and Polarcus Shipholding AS and second priority share pledge in the shares of Polarcus DMCC;

First priority assignment of any charter party/employment contract with duration of more than 12 months related to each of the vessels;

First priority assignment of certain intercompany loans;

First priority floating equipment charge of any inventory of the Norwegian incorporated borrowers and for any borrowers in other jurisdictions where legally and practically possible;

Second priority pledge over USD 6 million held in retention accounts;

Third priority pledge over the streamers purchased from the bankruptcy estate of Dolphin Geophysical AS described under Section 9.8.6 below; and

Unconditional and irrevocable on-demand guarantee from Polarcus Limited and parents of the vessel owning companies.

The Fleet Bank Facility includes covenants applicable to Polarcus Limited and its subsidiaries. Financial covenants include a minimum liquidity reserve of USD 10 million, minimum equity ratio of 20%, and positive working capital. Furthermore, the debt service ratio, EBITDA (including proceeds from equity issues) divided by total interest and principal payments on external debt, not including repayments made before or at final maturity date that is refinanced by new debt, shall on a consolidated basis be >1.00x until Q4 2018 and >2.0x

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from Q1 2019. In addition, there is a cash sweep mechanism, providing for sweep of any excess cash to the holders of A bonds (18%), the lenders under the Fleet Bank Facility (67%) and sale and lease back provider (15%) until 1 January 2018, and thereafter 100% to the lenders under the Fleet Bank Facility.

The Fleet Bank Facility otherwise includes covenant and default provisions normal for ship financing, including vessel insurance and maintenance provisions, distribution restrictions, restrictions related to asset disposal, restructuring, change of business, negative pledge and restrictions related to new debt.

The lenders have the right to declare the tranches or commitments thereof, including accrued interest and expenses, to be in default and due for immediate payment, inter alia, in a situation where (i) any of the vessel owners or any guarantor default on its obligations of the Fleet Bank Facility, (ii) any other financial obligation or commitment of a vessel owner or a guarantor exceeding USD 5 million is cancelled, declared due and payable prior to maturity or is not paid when due as a result of an event of default, (iii) in case of insolvency or other standard event of default situations as further stipulated in the loan agreement.

The Fleet Bank Facility contains restrictions on distribution of dividends, stating that the Company shall not distribute any dividends, reduce any of its share capital or make any other distributions in whatever form to its shareholder(s) or any other person(s). The same restrictions apply under the working capital facility.

The loan agreement is governed by Norwegian law with Oslo District Court as dispute venue.

9.8.3 2.875% Convertible Bond issue 2011/2016

The Company launched a USD 125 million convertible bond issue in April 2011. The purpose of the bonds was to finance the re-acquisition and completion of the vessel POLARCUS SELMA (later bareboat chartered under name VYACHESLAV TIKHONOV). The bonds are, inter alia, secured by a 1st priority vessel mortgage over VYACHESLAV TIKHONOV, related equipment, its insurances, inter-company loans, pledge of shares in the vessel owner and upstream guarantee from the vessel owner. Nordic Trustee ASA is acting as bond trustee for the bond issue.

The terms and conditions of the convertible bond issue were amended and restated in February 2016 as part of the Restructuring. The security structure for the bonds has not been amended, however the holders of B and/or C bonds have contractually subordinated their claims to those of the holders of A bonds.

The bonds are split into three tranches; Tranche A bonds ("CB Tranche A"), Tranche B1 bonds ("CB Tranche B1") and Tranche B2 bonds ("CB Tranche B2"). The A bonds are repaid in quarterly instalments of USD 1,750,000 while the B1 and B2 bonds are payable in full at maturity.

The A bonds carry a fixed annual coupon of 5.6% p.a. The CB Tranche B1 bonds carry a coupon ranging from 3.5% p.a. to 5.00% p.a. and the B2 bonds carry a coupon ranging from 2.50% to 3.60% p.a. during the loan period, increasing throughout the loan period. The coupon payable on the CB Tranche B1 and CB Tranche B2 bonds will be reset in the event of a so-called Reset Event and will in that event range from 6% to 14% during the loan period, increasing throughout the loan period. Interest is payable quarterly for the A bonds and semi-annually for the B1 bonds and the B2 bonds.

The bonds are convertible into Ordinary Shares of Polarcus, at a conversion price of USD 15.48 per Ordinary Share as per 4 December 2015. The conversion option may be exercised at any time from the issuance date up until the earlier of 10 days before the maturity date of the bonds or 10 days before the date of redemption of the bonds. The conversion price is subject to standard adjustment provisions.

Upon a delisting of Polarcus' Shares or a change of control event (50% of the votes) in

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Polarcus, (i) each bondholder holding A Bonds may require Polarcus to redeem the A bonds at par plus accrued interest or convert A Bonds at a change of control conversion price calculated in accordance with a defined formula; and (ii) each bondholder holding B1 bonds and/or B2 bonds may require that the Company redeem the B1 bonds and/or B2 bonds at a pre-set prevailing call price level plus accrued interest or convert its B1 bonds and/or B2 bonds at a change of control conversion price calculated in accordance with a defined formula.

Polarcus may, on or after the date falling approximately three years after the issuance, call the remaining part of the A bonds at its par value plus accrued interest, provided that the parity value (the underlying value of the bond) on each of at least twenty dealing days within a period of thirty consecutive dealing days have exceeded USD 1.3 and provided that 90% or more of the A bonds issued on the issue date have been redeemed, converted into Ordinary Shares or purchased and cancelled.

Before a so-called Reset Event has occurred, Polarcus may call the remaining part of the B1 bonds in whole or in part at pre-set call price level ranging from 33% of par to 50% of par and the B2 bonds in whole or in part at a pre-set call price level ranging from 24% of par to 36% of par during the loan period and increasing throughout the loan period. After a Reset Event the B1 bonds and B2 bonds will be merged into one tranche with one ISIN and the call price for the remaining bonds will be 100% of par.

The bond agreement contain a cash sweep provision, providing for sweep of any excess cash during a certain period, to be divided between holders of A bonds (18%), the lenders under the Fleet Bank Facility (67%) and the sale and lease back provider (15%).

The A bonds mature in March 2022 and the B1 bonds and B2 bonds mature in December 2022. If bond holders use their conversion right Polarcus may for each bond that is converted exercise a cash settlement option to redeem the bond by settling the principal amount of the bond (USD 1.0) in cash and the remaining value in Shares.

The loan includes normal covenants and default provisions according to market practice.

The loan agreement is governed by Norwegian law with Oslo District Court as the dispute venue.

9.8.4 USD 95 million Senior Unsecured Bond Issue 2013/2018

On 7 June 2013 the Group issued a USD 95 million bond. The net proceeds after deducting transactions costs were USD 93.1 million. USD 60 million of the net proceeds of these bonds was used to repay the 12.5% senior secured bonds. The remaining proceeds were used to repay the liability under the 8.5% convertible bonds (USD 35 million) at their maturity on 30 July 2013. Nordic Trustee ASA as acting as bond trustee for the bond issue.

The terms and conditions of the senior unsecured bond issue were amended and restated in February 2016 as part of the 2016 Restructuring and 2017 Amendments.

The bond are split into A Bonds and B Bonds. There are no instalments and the bonds are payable in full at maturity in December 2022.

The A bonds carry a coupon ranging from 3.5% p.a. to 5.00% p.a. and the B bonds carry a coupon ranging from 2.50% to 3.60% p.a. during the loan period, increasing throughout the loan period. The coupon payable on the bonds will be reset in the event of a so-called Reset Event and will in that event range from 6% to 14% during the loan period, increasing throughout the loan period. Interest on the bonds accrues from and including 1 July 2018 and payable semi-annually.

The bond agreement includes the following financial covenants:

Equity ratio of minimum 20%;

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Minimum liquidity of USD 10 million; and

Maintenance of positive working capital.

The financial covenants will apply for Polarcus on a consolidated basis at all times and will be tested on a quarterly basis. The loan further includes normal covenants and default provisions according to market practice, including but not limited to dividend restrictions, negative pledge, financial indebtedness restrictions and restrictions on intra-group balances and disposals of assets.

Upon a change of control event occurring, each bondholder may require Polarcus to redeem the bonds at a pre-set prevailing call price level (plus accrued interest) within two months after Polarcus has given notice to the bond trustee of a change of control event. Before a so-called Reset Event has occurred, Polarcus may call the A Bonds in whole or in part at pre-set call price level ranging from 33% of par to 50% of par and the B Bonds in whole or in part at a pre-set call price level ranging from 24% of par to 36% of par during the loan period and increasing throughout the loan period. After a Reset Event the A Bonds and B Bonds will be merged into one tranche with one ISIN and the call price for the remaining bonds will be 100% of par.

The bond contains restrictions on dividends stating that distributions shall be limited to 50% of the net income of the Group based on the audited annual accounts for the previous financial year, and dividend distribution is subject to the Group's liquidity after such distribution exceeding USD 40 million.


9.8.5 NOK 350/500 million Senior Unsecured Bond Issue 2014/2019

On 8 July 2014 the Company issued 5 year senior unsecured bonds totalling NOK 350 million. Part of the proceeds from the new bonds were used to repurchase USD 9.4 million of the USD 95 million 8% senior unsecured bonds and the remaining net proceeds were used to repay the outstanding NOK 226 million of the NOK 230 million 14% senior unsecured bonds maturing November 2014 (ref 8.7.6). Nordic Trustee ASA is acting as bond trustee for the bond issue.

The terms and conditions of the senior unsecured bond issue were amended and restated in February 2016 as part of the 2016 Restructuring and 2017 Amendments.

The bonds are split into A Bonds and B Bonds. There are no instalments and the bonds are payable in full at maturity in December 2022.

The A Bonds carry a coupon ranging from 3.5% p.a. to 5.00% p.a. and the B Bonds carry a coupon ranging from 2.50% to 3.60% p.a. during the loan period, increasing throughout the loan period. The coupon payable on the bonds will be reset in the event of a so-called Reset Event and will in that event range from 6% to 14% during the loan period, increasing throughout the loan period. Interest on the bonds accrues from and including 1 July 2018 and payable semi-annually.

The bond agreement includes the following financial covenants:

Equity Ratio of minimum 20%;

Minimum Liquidity of USD 10 million; and

Positive Working Capital.

The financial covenants will apply for Polarcus on a consolidated basis at all times and will be tested on a quarterly basis. The loan further includes normal covenants and default provisions according to market practice, including but not limited to dividend restrictions, financial

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indebtedness restrictions, financial support restrictions and restrictions on disposals of assets.

Upon a change of control event occurring, each bondholder may require Polarcus to redeem the bonds at a pre-set prevailing call price level plus accrued interest within fifteen days after Polarcus has given notice to the bond trustee of a change of control event.

Before a so-called Reset Event has occurred, Polarcus may call the A Bonds in whole or in part at pre-set call price level ranging from 33% of par to 50% of par and the B Bonds in whole or in part at a pre-set call price level ranging from 24% of par to 36% of par during the loan period and increasing throughout the loan period. After a Reset Event the A Bonds and B Bonds will be merged into one tranche with one ISIN and the call price for the remaining bonds will be 100% of par.

The bond contains restrictions on dividends stating that distributions shall be limited to 50% of the net income of the Group based on the audited annual accounts for the previous financial year, and dividend distribution is subject to the Group's liquidity after such distribution exceeding USD 40 million.


9.8.6 USD 8 million Streamer loan

On 11 March 2016, Polarcus Naila AS and the Company (as guarantor) entered into a sale and purchase agreement with the bankruptcy estate of Dolphin Geophysical AS under which Polarcus Naila AS agreed to purchase a complete marine seismic in-sea acquisition system for the price of USD 11.5 million. The purchase was completed on 21 March 2016.

The purchase is partly financed through a loan of USD 8 million from Sparebanken Vest. The loan shall be repaid in eighteen consecutive monthly repayment instalments and the interest is equal to LIBOR + 4% or at certain conditions, LIBOR + 5%. The loan from Sparebanken Vest is secured by a guarantee from the Company in addition to a pledge over the machinery and plant of Polarcus Naila AS and an assignment of insurance claims in respect of the purchased streamer equipment.

The outstanding amount under the streamer loan as at 31 December 2016 is USD 6.2 million. The loan is expected to be fully repaid in February 2018.

In connection with the temporary reclassification of the Fleet Bank Facility loan as a current liability (See Section 9.5.5 "Operating and financial information – Operating and financial review – Development in 2016") Sparebanken Vest issued Polarcus Naila AS with a waiver of any event of default that may have arisen due to the effect of the reclassification on the working capital covenant.

9.8.7 Vendor financing – contracts with Sercel for marine acquisition equipment

During 2014 and 2015, the Company purchased seismic acquisition equipment totalling USD 10.7 million from Sercel Inc under an instalment scheme, pursuant to three promissory notes, secured by the equipment. A down payment of 10% was made on different purchase dates, 55% of the loan value is payable over the first 12 months in equal instalments and the remaining 35% is payable over the next 12 months in equal instalments. No interest is payable for the first 12 months after which an interest rate of 8% per annum is payable on the outstanding balance. The effective interest rate of this overall arrangement is calculated at 1.81%.

The outstanding amount under the instalment scheme as at 31 December 2016 is USD 0.7 million. The outstanding amount is due to be fully re-paid by April 2017.

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9.8.8 Other facilities

Working Capital Facility

On 9 April 2015, the Company's subsidiaries Polarcus Asima AS, Polarcus Alima AS, Polarcus Amani AS, Polarcus Adira AS and Polarcus Shipholding AS (each as borrowers) entered into a USD 25 million working capital facility agreement with DNB Bank ASA. The working capital facility agreement has subsequently been amended on 12 August 2015 and on 23 February 2016, the latter amendments being made in connection with the 2016 Restructuring.

The amendments made in connection with the 2016 Restructuring and 2017 Amendments involved an extension of the final maturity for the working capital facility to 1 July 2019 and also involved adjustments of the conditions for utilisation of the facility to make the facility more accessible.

The interest on drawn amounts under the facility is equal to LIBOR + 3.50% p.a.

On 16 February 2017, Polarcus Shipholding AS drew down USD 10 million from the working capital facility.

The working capital facility is secured by the following securities which also secure obligations under the swap arrangements (up to an amount of USD 15 million) and obligations in respect of guarantees issued after 1 March 2015 under the common terms agreement described below; (i) second priority mortgage over the vessel POLARCUS ASIMA, POLARCUS ALIMA, POLARCUS AMANI and POLARCUS ADIRA, (ii) assignment of earnings and insurances in respect of such vessels, (iii) pledge over machinery and plant by each of the borrowers, (iv) factoring pledges by each of the borrowers, (v) share pledges over the shares in Polarcus MC Ltd, Polarcus Seismic Ltd, Polarcus Norway AS and Polarcus Pacific Ltd, and (vi) pledge by Polarcus Asia Pacific Ltd over its multi-client library. In addition, the Company has also pledged a USD bank account as security for obligations under the working capital facility, the swap arrangements (up to an amount of USD 15 million) and for guarantees issued after 30 May 2015. In connection with the 2017 Amendments, additional security was agreed to be established in the form of (i) a first priority pledge over retention accounts in the amount of USD 6 million, (ii) a first priority pledge over the shares in Polarcus DMCC and (iii) second priority pledge over the streamers purchased from the bankruptcy estate of Dolphin Geophysical AS as described under Section 9.8.6 above.

Guarantee Facility On 15 December 2014, the Company entered into a common terms agreement with DNB Bank ASA in respect of an USD 20 million uncommitted guarantee facility. In connection with the 2016 Restructuring, certain technical amendments were made to the common terms agreement by an amendment agreement dated 23 February 2016.

Reference is made to the description of the working capital facility in respect of the securities provided for the obligations in respect of guarantees issued after 1 March 2015 under the common terms agreement. Guarantees issued before 1 March 2015 (up to an amount of USD 20 million) is secured by the same security as provided under the Fleet Bank Facility, pari passu with the obligations thereunder.

As of 31 December 2016, guarantees in an amount of USD 5.1 million have been issued by DNB Bank ASA under the common terms agreement.

Cross Currency Interest Rate Swap Agreement

On 8 July 2014, the Company entered into a cross currency interest rate swap agreement for its liability under the NOK 350 million unsecured bond to swap the fixed interest rate NOK obligations under this bond into USD floating rate obligations. As part of the cross currency swap agreement, when the mark-to-market value of the swap was in excess of USD 14.5 million negative (being the amount of the available credit line), the Company would be required to pay such excess as cash collateral to the issuing bank (DNB). On 23 September

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2016, given the change to the currency exchange rates since the date of the agreement, the Company reduced the size of the swap agreement to NOK 187 million to better match the currency exposure associated with the call price of the NOK unsecured bond issue. Consequently, when the mark-to-market value of the swap is in excess of USD 7.8 million negative (being the amount of the available credit line), the Company is required to pay such excess as cash collateral to DNB.

As at 31 December 2016, a total amount of USD 3,119,682 was paid to DNB as cash collateral under the swap agreement. Valuations are carried out on a weekly basis.

9.8.9 Operating lease commitments

As part of the 2016 Restructuring, the leases of POLARCUS NADIA and POLARCUS NAILA were made operational. See Section 9.8.9 for further details. The future aggregate minimum lease payments under such non-cancellable operating leases as at 31 December 2016 are shown in the table below (which includes the further extension by one year of the operating leases to 2022 agreed as part of the 2017 Amendments):

(In thousands of USD) POLARCUS NADIA POLARCUS NAILA Total Within one year from 31-Dec-2016 2,920 3,468 6,388 After one year but not more than five years 32,183 37,992 70,175 More than five years 8,117 10,521 18,638 Total 43,220 51,980 95,200

9.9 Capital resources and indebtedness

Financial risk management

For a description of the Company's financial risk management, including funding and treasury policies please see note 3 of the 2015 Annual Report incorporated by reference to this Prospectus http://hugin.info/151377/R/2003456/739508.pdf.

Working capital statement

At the date of this Prospectus, the Group has sufficient working capital for its present requirements for the next 12 months.

Reclassification of Fleet Bank Facility loan

During Q4 2016, the Company received a reset of the Debt Service Ratio (DSR) to 0.75 from 1.25 (the "Waiver"). Due to wording included with the Waiver, a strict interpretation of IAS 1.69 requires that the Fleet Bank Facility be temporarily reclassified as a current liability at 31 December 2016 as the interpretation is that the Company did not have an unconditional right to defer payment for 12 months at that date. The Fleet Bank Facility is expected to be reclassified as a non-current liability in Q1 2017. The Company was not in default of the DSR covenant or any other covenant in any of its financing arrangements during Q4 2016. The capitalisation tables below are based on the substance of the Fleet Bank Facility being long-term, and not current as per the technical IFRS temporary classification at 31 December 2016.


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Capitalisation and indebtedness

Capitalisation

(In '000s of USD) As of

31 December 2016 Changes since 31 December 2016⁴

As adjusted

Total current debt:

Guaranteed 0.0 0 0.0

Secured 1 260,928 0 260,928

Unguaranteed/Unsecured 18,155 0 18,155

Total current debt 279,083 0 279,083

Total non-current debt (excluding current portion of long-term debt):

Guaranteed 0.0 0 0.0

Secured 1 6,006 0 6,006

Unguaranteed and unsecured 0.0 0 0.0

Total non-current debt 6,006 0 6,006

Total indebtedness 285,089 0 285,089

Shareholders' equity

Share capital 2 591,706 37,340 629,046

Legal Reserve 0.0 0 0.0

Other Reserves 3 (412,899) 0 (412,899)

Total shareholders' equity 178,807 37,340 216,147

Total capitalisation 463,896 37,340 501,236

1 The convertible bonds with carrying value USD 16.4 million at end Q4 2016 have security in the vessel VYACHESLAV TIKHONOV. The Fleet Bank loan facility, carrying value USD 243.6 million, has security in the vessels POLARCUS ASIMA, POLARCUS ALIMA, POLARCUS ADIRA, and POLARCUS AMANI. The Fleet Bank facility is a loan agreement for a bank facility, with Eksportfinans ASA as lender and with DnB Bank ASA and DVB Bank SE, Nordic Branch, together with Garanti-instituttet for Eksportkreditt ("GIEK") as guarantors. See Section 9.7.2 for more information regarding The Fleet Bank facility. The liability for seismic equipment with carrying value USD 6.9 million has security in certain of the Company’'s streamers.

2 Issued share capital and share premium from the Company's consolidated balance sheet as per Q4 2016.

3 Other reserves minues retained earnings/(loss) from the Company's consolidated balance sheet as per Q4 2016.

⁴ Equity raise in March 2017 equated to USD 37.3 million after deduction of direct costs and before potential subsequent repair offerring.

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Indebtedness

(In '000s of UDS) As of

31 December 2016 (unaudited)

Changes since 31 December 2016¹

As adjusted

(A) Cash 13,731 37,340 51,071

(B) Cash equivalents 731 0 731

(C) Trading securities - - -

(D) Liquidity (A)+(B)+(C) 14,462 37,340 51,802

(E) Current financial receivables 6,395.1 0 6,395.1

(F) Current bank debt - -

(G) Current portion of non-current debt 6,006 0 6,006

(H) Other current financial debt - - -

(I) Current financial debt (F)+(G)+(H) 6,006 0 6,006

(J) Net current financial indebtedness (I)-(E)-(D) -14,851.1 0 -52,191.1

(K) Non-current bank loans 244,501 0 244,501

(L) Bonds issued 34,582 0 34,582

(M) Other non-current loans - - -

(N) Non-current financial indebtedness (K)+(L)+(M) 279,083 0 279,083

(O) Net financial indebtedness (J)+(N) 264,231.9 -37,340 226,891.9

¹ Equity raise in March 2017 equated to USD 37.3 million after deduction of direct costs and before potential subsequent repair offerring

The capitalisation table above includes both interest-bearing and non-interest-bearing assets and liabilities. The indebtedness table above includes only interest-bearing assets and interest-bearing liabilities.

Apart from the Private Placement, there have been no material changes in capital resources and indebtedness subsequent to 31 December 2016.

9.10 Auditors

The Company's auditor since its incorporation has been Ernst & Young AS. The address of the auditor is Dronning Eufemias gate 6, NO-0191 Oslo, Norway.

The financial statements for 2013, 2014 and 2015 were audited by Ernst & Young AS. In the Company's Annual Report from 2014, the Company's auditor, Ernst & Young AS, highlighted the Company's evaluation of its going concern assumption at that time, which was disclosed by the Company in the notes to the financial statements. The reason for the Company assessing its going concern assumption at that time as having a material uncertainty was due to a tie-up of working capital, a decline in oil prices creating significant market uncertainty, and the Company needing to secure sufficient backlog in the future. The auditor emphasized the going concern assumption, liquidity risks and loan covenants, as well as the impairment assessment for the Company's vessels and seismic equipment. Based on these factors, as well as the market and financing situation, it was the auditor's opinion that there was an indication of uncertainty regarding the Company's ability to continue as a going concern. In the Company's most recent Annual Report from 2015 there are no qualifications in the audit report.

The 2013 audit report can be found in the 2013 Annual Report http://hugin.info/151377/R/1775449/605465.pdf, page 100.


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The 2014 audit report can be found in the 2014 Annual Report https://polarcus.com/media/1498/annual-report-2014-final-v2.pdf, page 104.

The 2015 audit report can be found in the 2015 Annual Report http://hugin.info/151377/R/2003456/739508.pdf, page 100.

Ernst & Young AS has not audited, reviewed or produced any report on any other information provided in this Prospectus. Ernst & Young AS is a state authorized public accounting firm (Norway) and member of Den Norske Revisorforening (The Norwegian Institute of Public Accountants)



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10. BOARD OF DIRECTORS, MANAGEMENT AND EMPLOYEES

10.1 Introduction

The General Meeting is the highest authority of the Company. All shareholders in the Company are entitled to attend and vote at General Meetings of the Company and to table draft resolutions for items to be included on the agenda for subsequent General Meetings.

The overall management of the Company is vested in the Board of Directors and the Management. Consistent with Norwegian law and Cayman Islands law, the Board of Directors is responsible for, among other things, supervising the general and day-to-day management of the Company's business ensuring proper organisation, preparing plans and budgets for its activities ensuring that the Company's activities, accounts and management of its assets are subject to adequate controls and undertaking investigations necessary to perform its duties.

The Management, whose duties are delegated by the Board, is responsible for the day-to-day management of the Company's operations consistent with Norwegian law and in accordance with instructions set out by the Board of Directors. Among other responsibilities, the Company's CEO is responsible for keeping the Company's accounts in accordance with applicable law and for managing the Company's assets in a responsible manner.

10.2 Board of directors

The Board of Directors (the "Board") of Polarcus is responsible for administering the Company's affairs and for ensuring that the Company's operations are organized in a satisfactory manner.

The directors are elected for service periods of up to two years. Directors may be re-elected and there is no limit on the number of terms that any one director may serve.

Nomination committee

The 2016 AGM approved the appointment of the members of the nomination committee for a one year period. The committee is mandated to evaluate and submit a recommendation to the AGM on nominees for election as members and possibly deputy members of the Board and the chairman of the Board, remuneration of the Board and recommendation on subsequent nominees to the nomination committee and amendments to the committee's terms of reference.

The terms of reference under which the nomination committee operates are incorporated to this Prospectus by reference and can be found at the following web-page: http://www.polarcus.com.

The current members of the nomination committee are Mrs. Katherine Hall (Chair), Mrs. Karen El-Tawil and Mr. Kristian Falnes. The members of the nomination committee are elected for a period of 1 year. Mrs. Katherine Hall and Mr. Kristian Falnes are independent representatives. None of the members hold any employment position within the Polarcus Group.

The 2016 AGM approved fees for the nomination committee for 2015 of USD 6,000 for the committee chair and USD 3,000 for each other member in addition to USD 1,500 per member per committee meeting, the fees being payable annually.

10.2.1 Board members

The Annual General Meeting

The Annual General Meeting (the "AGM") 2016 approved the following directors' fees for 2016: USD 120,000 for the Chairman, and USD 55,000 for each of the other directors, as well as USD 1,500 per director per committee meeting. The directors' fees are paid quarterly in arrears on each of 30 June, 30 September, 31 December and 31 March. By separate


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agreement, the Board of Directors agreed to a reduction in their annual fee (i.e. not including the fee for committee meetings) of 10% commensurate with the reduction voluntarily implemented by the Company's Management (described below). This reduction has been in place since October 2014.

The Board of Polarcus, their shareholdings and their annual remuneration as of the date of this Prospectus is given in the table below:

Name of director1 Director since

Current term expires AGM

Shares owned

Options owned

Remuneration paid (in USDk) 2016

Peter M. Rigg, Chairman

20-Jun-08 2017 793,488 0 123

Arnstein Wigestrand 29-Apr-13 2017 0 0 57

Carl Peter Zickerman 12-May-16 2017 89,201,798

0 32

Karen El-Tawil 13-Feb-14 2018 42,500 0 57

Tom Henning Slethei 12-May-16 2017 47,430,114 0 36

Erik Mathiseen 12-May-16 2017 750,000 0 32

Christopher Kelsall2 12-May-16 29 April 2017 0 0 35

Nicholas Smith 6-March-2017 2017 0 0 N/A 1 The term of appointment of Mr Carl-Gustav Zickerman, Mr Tore Karlson and Mr Thomas Kichler expired at the 2016 AGM. In respect of 2016 remuneration, Mr Carl-Gustav Zickerman was paid USD 18,000, Mr Karlson was paid USD 21,000 and Mr Kichler was paid USD 23,000.

2 Mr Kelsall resigned as a director on 29 January 2017.

The business address of all directors is: c/o Company Secretary, Almas Tower, Level 32, Jumeirah Lakes Towers, PO Box 283373, Dubai, UAE.

The following provides a profile of the members of the Board as of the date of this Prospectus:

Peter Rigg, Chairman (born 1948) Peter Rigg has an extensive background in investment banking with over 25 years' experience working in Asia and Europe, principally for Credit Suisse First Boston where he was a worldwide Managing Director responsible for Asian Equity Capital Markets. He is currently non-executive Chairman of MXC Capital plc, an AIM listed technology investment company, and is an independent non-executive Director of Schroder's Oriental Income Fund Limited. Mr. Rigg is also an investment committee member of the China Car Parking Investment Fund and a member of the Advisory Board of South West Energy, a privately owned Company with oil interests in Ethiopia. Mr. Rigg is a qualified solicitor and Chairman of the Board of Polarcus Ltd. Mr. Rigg currently holds the following directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries):

MXC Capital Plc, Chairman

Schroder's Oriental Income Fund Limited, Independent non-executive Director and Chairman of the Audit and Management Engagement Committees

Cartesius Advisory Network, non-executive Director; and

South West Energy, Advisory Board member.

Furthermore, Mr. Rigg has previously held the following directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries):

GEMS Oriental and General Fund II, Independent non-executive Director; and

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GEMS Fund III, Independent non-executive Director.

Arnstein Wigestrand (born 1957) Arnstein Wigestrand has more than 20 years' working experience in the upstream and downstream oil industry which started as a geologist/geophysicist with Statoil followed by a number of years with Saga Petroleum. He has worked as oil service analyst for a decade for Handelsbanken and SEB Enskilda. Arnstein is currently an independent adviser and investor. He holds a graduate engineering degree from Norges Tekniske Høgskole and a business degree from Institut Français du Pétrole. Arnstein is currently chairman of Haukeli Invest AS, Haukeblikk AS and SP Capital 23 AS.

Mr. Wigestrand currently holds the following directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries):

Haukeli Invest AS, Chairman

Haukeblikk AS

SP Capital 23 AS, Chairman

Furthermore, Mr. Wigestrand has previously held no other directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries).

Carl Peter Zickerman (born 1972) Peter Zickerman has two decades of experience in the seismic industry. He was the Founder of Eastern Echo Ltd where he held the position of Executive Vice President & Business Development and was a member of the board. In 2008 he founded Polarcus where he held the position as Executive Vice President & Head of Strategic Investments until February 2016, and was also a member of the board between 2008 and 2012. His experience covers both maritime and seismic operations, strategy and commerce. Peter holds a B.Sc. in Marine Engineering from Kalmar Maritime Academy, Linnaeus University, Sweden.

Mr. Zickerman currently holds the following directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries):

Zickerman Group Limited, director

DNV GL Middle East National Committee, member

Mr. Zickerman has previously held no directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries).

Karen El-Tawil (born 1961) Karen El-Tawil has over 30 years of experience in the geophysical services industry, with 15 years at the executive level. Mrs. El-Tawil retired from TGS-NOPEC Geophysical Company in 2012 as Vice President Business Development and her management experience includes: Quality Control, Project Development, Customer Service, Marketing, Sales, Information Technology, Investor Relations and Mergers and Acquisitions. Mrs. El-Tawil was with Western Geophysical from 1984 through 1987, Schlumberger Geco-Prakla from 1987 through 1997, and TGS-NOPEC from 1997 through 2012. Mrs. El-Tawil has degrees in earth science and mathematics from Adrian College, Michigan. Mrs. El-Tawil is a director of Pulse Seismic Inc, an onshore multi-client company traded on the Toronto exchange.

Mrs. El-Tawil currently holds the following directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries):

Pulse Seismic Inc, Board Member

Furthermore, Mrs. El-Tawil has previously held the following directorships, supervisory or leading management positions during the last five years (other than positions in the Company

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and/or its subsidiaries):

TGS-NOPEC Geophysical Company, Vice President Business Development

Tom Henning Slethei (born 1974) Tom Henning Slethei has been an investor in the stock and bond market over two decades. He is Chairman and owner of various companies within the real estate and finance sectors. He has extensive Board experience including as Chair of the nomination and compensation committees, Noreco ASA, as Chairman of the Board, Jåsund Utviklingsselskap AS and Sola Bredband AS, and as a Director at Forus Naeringspark.

Mr. Slethei currently holds the following directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries):

Alto Holding AS, chairman

Alto Invest AS, chairman

Hestholmen AS, chairman

Jåsund Utviklingsselskap AS, chairman

Sameiet Krossenbygget Sola, chairman

Skiftesvik AS, chairman

Sola Bredbånd AS, chairman

Solakrossen 13 AS, chairman

Stokkavik AS, chairman

Vestø AS, chairman

Ivar Iks, director

Ivar Næring AS, director

Kvithei Utbyggingsselskap Sola Kf, director

Nord Jæren Bompengeselskap AS, director

Sola Tomteselskap Kf, director

Furthermore, Mr. Slethei has previously held no other directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries).

Erik Mathiesen (born 1970) Erik Mathiesen was until January 2017 a Founding partner of Storm Capital Management, London, an independent asset management firm focusing on energy, transportation and real estate in the Nordics. He was also CEO of Storm Real Estate ASA. He has worked in corporate finance advisory in shipping and oil services as a partner for EC Hambro Rabben, London and in corporate banking at Hambros Bank, London.

Mr. Mathiesen currently holds the following directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries):

Sisu Holding, director.

Furthermore, Mr. Mathiesen has previously held the following directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries):

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Storm Capital Management, partner

Storm Real Estate ASA, CEO

Nicholas Smith (born 1951) Nicholas Smith is a Chartered Accountant with a long-term career in investment banking and as CFO of Asian investment bank Jardine Fleming Group. He has had a successful non-executive track record in the public E&P sector and investment trusts, including seven years as Chairman of Ophir Energy plc, and as board member for several other AIM listed companies.

Mr. Smith is ACA 1975, FCA 1980, BA (Open) 2008. He is a British citizen.

Mr. Smith currently holds the following directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries):

Chairman of Aberdeen New Thai Investment Trust;

Chairman of Schroder Asia Pacific Investment Fund, where he was previously Chair of Audit and Senior Independent Director; and

a board member for JPMorgan European Small Companies Investment Trust PLC where he is also Chair of Audit.

Furthermore, Mr. Smith has previously held the following directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries):

Ophir Energy PLC, Chairman from September 2009 until retirement in April 2016. Ophir is a FTSE exploration company that listed in July 2011;

Asian Citrus Holdings Ltd, appointed director at the AIM flotation in 2005. Chairman of Remuneration Committee and member of Audit Committee. Left the Board in March 2013;

Sorbic International Ltd, director since 2008, member of the Audit Committee and Chairman of the Remuneration Committee. Left the Board in December 2012;

Japan Opportunities II Fund, non-executive director and Chairman of the Audit Committee in October 2009. Appointment ceased in June 2012.

10.2.2 Board committees

The Board of Directors has established board committees: (i) corporate governance and remuneration committee, and (ii) audit committee. The AGM of the Company resolved to remunerate a director's participation in the corporate governance and remuneration committee and the audit committee with USD 1,500 per meeting per committee member.

Corporate governance and remuneration committee

The current members of the corporate governance and remuneration committee are Mrs. Karen El-Tawil (Chair), Mr. Peter Rigg and Mr. Tom Henning Slethei. Each member of the corporate governance and remuneration committee holds such position until he/she resigns, is removed by resolution of the Board or otherwise ceases to be a director.

The committee is mandated to regularly review and update the Company's governance commitments and structure, and to review proposals from Management on bonus and option schemes and other benefits as well as general principles for the Group's salary and allowance program.

The terms of reference under which the corporate governance and remuneration committee operates are incorporated in this Prospectus by reference and can be found at the following

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web-page: www.polarcus.com.

Audit committee

Until 29 January, 2017, the members of the audit committee were Mr. Arnstein Wigestrand (Chair), Mr. Peter Rigg and Mr. Chris Kelsall. On 29 January 2017, Mr Kelsall resigned as a director. Given the complexity of financial and accounting issues which the Company was addressing at that time, the Board determined that the function of the audit committee temporarily be assumed by the full Board. This continues to be the Board's practice as at the date of this Prospectus.

The committee is mandated to regularly review and update the Company's governance commitments and structure, and to review the Company's proposals for quarterly accounts and various issues related to the account, introduction of new and changes to existing accounting principles, high level supervision of the budget process, to review and evaluate the Company's internal financial control and on behalf of the Board to liaise the Company's auditor and monitor the auditor's independence.

The terms of reference under which the audit committee operates are incorporated to this Prospectus by reference and can be found at the following web-page: http://www.polarcus.com.

10.2.3 Remuneration and benefits

Except for the benefits described in Sections 10.2.1 "—Board members", 10.2.2 "—Board committees" 10.3.2"—Management—Remuneration and benefits" and 10.5 "—Benefits upon termination", there are no service contracts between members of the administrative, management or supervisory bodies and the Company or any of its subsidiaries providing for benefits upon termination of employment.

10.2.4 Loans and guarantees

The Company has no outstanding loans or guarantees to any member of the Board.

10.3 Management

The Management of Polarcus currently comprises four executives with extensive domain knowledge within their job function and with senior management experience from across the seismic industry.

The Management of Polarcus currently includes the following:

Name Position

Duncan Eley Chief Executive Officer

Hans-Peter Burlid Chief Financial Officer

Caleb Raywood General Counsel & Company Secretary

Tamzin Steel SVP People & Business Services

The executives all have business addresses at Almas Tower, Level 32, Jumeriah Lakes Towers, PO Box 283373, Dubai, U.A.E.

The following provides a profile of the members of the Management of Polarcus as of the date of this Prospectus.

Duncan Eley (born 1972), Chief Executive Officer

Duncan Eley has over 17 years of experience in the seismic industry in various senior management roles across operations, technology manufacture & development and sales & marketing. He worked with Schlumberger for 10 years supporting marine seismic operations


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in Europe, West Africa and North America. Mr. Eley has a Bachelor of Science and Bachelor of Engineering (with Honours) from Monash University in Australia. In 2006 he completed his MBA at Erasmus University in Holland. Prior to joining Polarcus in 2009, Mr. Eley worked for several years with strategy consultancy firm, L.E.K. Consulting, across the energy, transport and natural resources sectors.

Mr. Eley was appointed COO of the Company in May 2013, and was appointed CEO in March 2017.

Mr. Eley currently holds no directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries)

Mr. Eley has previously held the following directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries):

LEK Consulting, Australasia, Senior Consultant;

WesternGeco, Gatwick, UK. Vessel Manager; and

WesternGeco, Singapore, Manager Seismic Cable Repair Facility.

Hans-Peter Burlid (born 1980), Chief Financial Officer

Hans-Peter Burlid has over 12 years of experience in the seismic industry with key roles in finance, accounting and business development. He was formerly Senior Manager, Business Development and co-founder of Eastern Echo Ltd and was instrumental in the start-up of Polarcus. Mr. Burlid holds a B.Sc. in Economics and Business Administration from Blekinge Institute of Technology, Sweden.

Mr. Burlid took over as CFO of the Company in March 2016 and replaced Tom Henrik Sundby.

Mr. Burlid has not served on any boards other than boards of Polarcus subsidiaries for the last five years.

Caleb Raywood (born 1970), General Counsel & Company Secretary

With 20 years of commercial experience, Mr. Raywood most recently acted as General Counsel and sat on the Board of Directors for Sea Trucks Group. Prior to this, Mr. Raywod worked for several years at Clyde & Co, an international law firm in London and Dubai specialising in shipping and maritime issues. Holding a Bachelor's Degree in English and European Law from the University of Essex (UK) and a Master's Degree in European Business Law from the University of Nijmegen, The Netherlands, he leads Polarcus' team of lawyers as a qualified Barrister and Solicitor Advocate.

Mr. Raywood joined the Group in June 2016.

Mr. Raywood currently holds no directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries)

Furthermore, Mr. Raywood has previously held the following directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries):

Director, Sea Trucks Group Limited (2015-2016)

General Counsel and Company Secretary, Sea Trucks Group Limited (2010-2016)

Tamzin Steel (born 1977), SVP People & Business Services

Tamzin Steel has over 15 years' experience working in global multinational companies in the oil & gas industry. Prior to joining the Polarcus team, Ms. Steel held senior leadership positions, with a focus on Human Resources and organisational change, most recently

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working for Abu Dhabi National Energy Company (TAQA). Tamzin holds a Bachelor's Degree (with Honors) in Business Studies from Robert Gordon University, Aberdeen.

Ms. Steel joined the Group in June 2016 and had previously advised the Group as a consultant since February 2016.

Ms. Steel currently holds no directorships, supervisory or leading management positions (other than positions in the Company and/or its subsidiaries).

Ms. Steel has previously held the following directorships, supervisory or leading management positions during the last five years (other than positions in the Company and/or its subsidiaries):

Abu Dhabi National Energy Company (TAQA), UAE, Group Vice President Human Resources; and

KCA DEUTAG Drilling Group, UK, Senior Vice President Human Resources.

The members of the Management are employed by Polarcus DMCC, a wholly owned subsidiary of Polarcus, which functions as the main administration and support company of the Group.

10.3.1 Management shareholdings

As per 31 December 2016, the members of the Management of Polarcus hold/control the following Shares and share options in Polarcus:

Manager Position Shares Total number of options

Duncan Eley Chief Executive Officer 50,000 1,358,500

Hans-Peter Burlid Chief Financial Officer 37,500 1,183,500

Caleb Raywood General Counsel & Company Secretary

0 500,000

Tamzin Steel SVP People & Business Services 0 500,000

10.3.2 Remuneration and benefits

To assist an extensive cost management program launched in H2 2014, the then current members of Management collectively volunteered to take a reduction in base salary of 10% for a period of time which was effective from 1 October 2014. This decision was reviewed in mid-2015 and the Management decided to continue with their reduced remuneration in which was confirmed to be a permanent change from 1 March 2016.

During 2016, a number of Group employees were awarded options. The options were granted according to the Company's 2016 share option scheme of which the main terms were approved in the Annual General Meeting of the Company on 12 May 2016. One third of the options could be exercised at the end of the second year after award, one third at the end of the third year after award, and one third at the end of the fourth year after award, each ending at the expiry of the option period. The options can only be exercised if the price for which the shares are traded (calculated as the volume weighted average price for which the Company's shares have been traded at Olso Stock Exchange in the previous period of 30 trading days) is at least 30% above the exercise price at one time during the exercise period.

Mr. Starr, former CEO, received 1,800,000 options, Mr. Eley received 1,200,000 options and Mr. Burlid received 1,050,000 options on 12 May 2016. The awarded share options had an exercise price of NOK 0.81 and an exercise period of 12 May 2018 to 11 May 2023.

Mr. Raywood and Ms. Steel each received 500,000 options on 16 June 2016. The awarded share options had an exercise price of NOK 0.62 and an exercise period of 16 June 2018 to 15 June 2023.

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The salaries and other benefits paid to members of Management for the financial year ended 31 December 2016 are shown in the table below.

(in thousands of USD)

Paid in year 2016

Amounts in thousands of USD

Salaries Performance Bonus

Other benefits

Total paid salary and benefits

Benefits paid to pension plan

Share option expenses

Duncan Eley1 297 16 182 495 31 35

Hans-Peter Burlid 288 16 151 455 30 33

Caleb Raywood2 144 7 91 243 13 3

Tamzin Steel3 155 7 74 236 12 3

Total4 1,309 68 624 1,429 129 94 1 The table shows the remuneration to Mr Eley in his capacity as COO in 2016. He was appointed CEO on 17 March 2017, and his remuneration will be at similar levels to that of former CEO Roderick Starr, see footnote 4 to this table.

2 Mr Raywood joined the Group on 15 June, 2016.

3 Ms Steel commenced as an employee and member of Management on 1 June, 2016.

4 In 2016, total paid salary, benefits and severance (excluding benefits paid to pension plan and share option amount expensed) was also paid to: Mr Carl-Peter Zickerman (EVP & Head of Strategic Investments) of USD 508,000. Mr Zickerman's employment terminated on 31 January, 2016; Mr Paul Lionel Hanna (SVP Human Resources) of USD 648,000. Mr Hanna's employment terminated on 30 April, 2016; to Mr Tom Henrik Sundby (CFO) of USD 435,000. Mr Sundby's employment terminated on 29 February 2016; and to Mr Roderick Starr (CEO) of USD 573,000. Mr Starr's employment terminated on 17 March 2017.

10.3.3 Loans and guarantees

As of the date of this Prospectus, the Company has no outstanding loans or guarantees to any member of the Management.

10.4 Employees

As of 31 December 2016, the Group had 435 employees of over 50 different nationalities, of which 319 work in the field as seismic and maritime crew on board the vessels. The Company's strategy is to employ its own crew to serve on-board the vessels. Contractors are used for the more junior maritime support roles. As of 31 December 2013 the Company had 558 employees, as of 31 December 2014 the Company had 605 employees and as of 31 December 2015 the Company had 475 employees.

The significant reduction in number of employees in 2015 was driven by the decision in Q1 2015 to cold-stack one of the Company's vessels, POLARCUS NADIA, as well as the cost saving plan implemented around the same time. The saving initiatives lead to a reduction in staff across the organisation and included both vessel crew and office based employees.

The further reduction in 2016 resulted largely from the reorganization announced on 1 February 2016 and subsequent ongoing efforts to manage costs and streamline the organization.

10.4.1 Employee remuneration

The Company has developed and implemented a comprehensive remuneration program designed to attract, motivate and retain the best talent from the global workforce.

The Company's strategy is to provide all employees with a fixed (non-variable) salary. Employees then have the possibility of increasing their compensation through participation in

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a performance-related bonus scheme. Based on the overall performance of the Company against certain pre-defined metrics, together with performance against individual and team-specific goals, the employee can benefit from a variable compensation in the range of 8% to 60% of base salary annually where the maximum bonus level depends on the employee's position in the Company. Field crew assigned as trainees are not eligible to participate in this bonus scheme. The structure of the performance-related bonus scheme will vary from year to year in line with company goals and a summary of the bonus payments made in the Company's history is reproduces in the following table:

Summary of Performance-related bonus payments

*Bonuses are typically paid in the year after the performance they relate to. There are various eligibility criteria including performance, employment start date, period of continuous service.

**The bonus in 2016 was a one-off plan introduced to align employee incentive with the necessary focus on generating free cash. The mechanism provided for partial payment on a quarterly basis when the performance criteria were met. 50% of any earned bonus was paid in the month following the relevant quarter results, with the remaining 50% retained in a pool for potential payment at year-end. The free cash performance targets were achieved in Q1 and Q3 and 50% of bonuses were paid for these quarters only (approximately 2.75% of annual base salary for each quarter). The Q2, Q4 and year-end targets were not achieved.

10.4.2 Employee long term incentive schemes

Since 2008, the Company has operated a number of long term incentive plans which have been implemented to support the Company's recruitment, retention and recognition requirements accordingly, and are designed to align employee performance with the longer-term objectives of the Company. Participation in the plan has varied from plan to plan, and included management and broader employee groups (both office-based and field-based) depending on the objectives of the Company at the time of each plan's inception. The long term incentive plans are all share option plans with durations which range from five to seven years. The plans provide employees with a grant of options which, subject to defined criteria and vesting periods, enable employees to exercise the options after two, three or four years from the date of grant. There are four plans which remain current and are described in detail in Section 12.2.5.

10.4.3 Employee health protection

The Group has implemented comprehensive employee health protection plans comprising a health care scheme providing inpatient and outpatient support, a short-term disability scheme protecting the employee against loss of base salary together with a long-term disability scheme to assist employees suffering illness or accidents that prevent the employee from working. In addition, the Group has implemented a life assurance scheme designed to provide a lump sum compensation in the event of employee death. All of these schemes are fully paid for by the Group.

Summary of Performance-related bonus payments*

2008 No payment to any employee

2009 8% of base salary paid to all eligible employees

2010 Paid based on 90% of employee's maximum bonus attainable


2012 Paid based on Scorecard result of 90%

2013 Paid based on Scorecard result of 75%



2016 Retention bonus paid to selected key employees. 5% of base salary paid to all eligible employees**

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10.5 Benefits upon termination

All employees have a contractual notice period related to the termination of their employment (apart from cases of employment termination for cause or during probationary periods of employment) during which they continue to receive their remuneration. In the event of a forced termination (involuntary termination apart from those for cause), the employee will receive a form of severance payment as defined by statute or their contact of employment.

Upon termination by the Company of the employment of any member of the Management (other than for cases of gross misconduct), the member is entitled to a severance payment of 12 months base salary plus expected benefits (i.e. cash remuneration including any anticipated bonuses, all allowances, and all other benefits currently provided to the employee). Most other employees of the Group are entitled to a severance payment equal to between 1 and 3 months of base salary.

The Management are entitled to retain their long term incentive awards in the event of their employment being terminated by the Company provided that they have at least five years of seniority in the Company.

In the event of a merger or a change of control in Polarcus, the Management are entitled within a reasonable period of time thereafter to terminate their employment and receive certain benefits (12 months of base salary and expected benefits) under certain conditions. This entitlement recognises that the executive is unlikely to remain in the same position, or in employment at all, after the changes.

Certain other Group employees are in the event of a merger or a change of control in Polarcus entitled within a reasonable period of time thereafter to terminate their employment and receive certain benefits (ranging from 6 to 12 months of base salary and expected benefits) under certain conditions.

10.6 Pension Scheme

In November 2010, the Group introduced a retirement savings ('pension') plan designed for many of its field-based and office-based employees. This defined contribution scheme is based on the employer company contributing a minimum of between 4% and 8% of employee base salary to the plan and there is no requirement for the employee to make a contribution. Enrolment is automatic following completion of an employee's employment probationary period and for employees that are making voluntary contributions through payroll, the employer company will make a further contribution of up to 2% of the employee's base salary where the amount depends upon the level of employee contribution. There is a vesting period of five years and the scheme is set up with the funds held under trust for the protection of the plan members (the employees).

The scheme has developed considerably subsequent to its inception providing employees with increased investment choices and a sub-plan to cater for specific employee groups. Since the scheme is a defined contribution savings scheme, the Group has no liability with regards the funds invested. The total funds under management related to Company investments is USD 18.52 million as at 31 December 2016, of which USD 0.54 million is for members of the Management.

In December 2014, the Group introduced a retirement savings plan for its office-based employees in Norway. This defined contribution scheme requires the employer company to contribute 5% of employee admissible compensation. There is no vesting period and the scheme is set up with the funds held under trust for the protection of the plan members (the employees). Since the scheme is a defined contribution savings scheme, the Group has no liability with regards the funds invested. The total funds under management related to Company investments is USD 0.02 million as at 31 December 2016.

In November 2015, the Group introduced a retirement savings plan for its office-based employees in the United Kingdom, UK. This pension scheme meets the legislation defined by

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The Pensions Regulator in the UK and specifically the Company's auto enrolment obligations. This defined contribution scheme requires employees to contribute a minimum of 6% of their base salary, though as per legislation, employees have the option to opt out of the scheme altogether. For employees that are making contributions through payroll, the employer company will contribute between 6% and 8% of employee base salary to this scheme where the amount depends upon the level of employee contribution. There is no vesting period and the scheme is set up with the funds held under trust for the protection of the plan members (the employees). Since the scheme is a defined contribution savings scheme, the Group has no liability with regards the funds invested. The total funds under management related to Company investments is USD 0.14 million as at 31 December 2016.

In January 2016, the Group introduced a retirement savings plan for its office-based employees in the United States of America. This voluntarily established private sector plans meets the requirements stipulated in the US's Employee Retirement Income Security Act (ERISA) and is by definition a qualified 401(k) retirement savings scheme. This scheme provides 100% employer matching contributions for employee contributions of between 3% and 6% of base salary, though as per legislation, employees have the option to opt out of the scheme altogether. There is a phased vesting scheme whereby after two years of employment seniority, the employee commences vesting in the employer contributions until after four years of seniority, the employee becomes 100% vested in the employer contributions, and the scheme is set up with the funds held under trust for the protection of the plan members (the employees). The total funds under management related to Company investments is USD 0.06 million as at 31 December 2016.

The total funds under management represent the current value of the accumulated amount the Company has paid in to the various pension funds for qualifying employees. The amounts previously paid n by the Company have been expensed in the income statement in the period in which the employees earned the pension contribution. The pension funds are not recognized in the Company's balance sheet as they are not funds owned by the Company.

10.7 Corporate governance

There exists no corporate governance code that in particular applies to companies incorporated under Cayman Islands law, outside of that provided for as a matter of Cayman Islands law and pursuant to the Articles of Association. The Companies Law and the Articles of Association provide for general and specific requirements of the Company as regards corporate governance, including (without limitation) regulations concerning distribution of capital, and the protection of creditors and shareholders. The Company is in compliance with these provisions through its Articles of Association, as incorporated by reference in Section 15.2 "Additional information—Incorporation by reference" of this Prospectus.

The Board of Directors of the Company has resolved to adapt to and comply with the Norwegian Corporate Governance Code to the extent reasonable for a company of its size and complexity and has prepared a single document summarizing how the code has been implemented by the Company. The latest version of this document, Corporate Governance Report for the year 2015, was adopted by the Board of Directors on 5 April 2016. The Corporate Governance Report for 2015 is incorporated by reference in Section 15.2 "Additional information—Incorporation by reference" in this Prospectus.

The Corporate Governance Report for the year 2015 includes a description of any deviations of the Company from the recommendations of the Norwegian Corporate Governance Code ("NUES") and is incorporated to this Prospectus by reference and can be found at the following web-page: http://www.polarcus.com/media/1776/polarcus-2015-corporate-governance-report.pdf. The Company complies with most of the recommendations in NUES. Deviations are described in sections 5.3.3, 5.6.3, 5.7.3 and 5.12.3 of the Corporate Governance Report for the year 2015. The Board of Directors will continuously develop and monitor its corporate governance commitments based on professional advice, experience, input from shareholders and the market in general.

http://www.polarcus.com/media/1776/polarcus-2015-corporate-governance-report.pdf


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10.8 Conflicts of interests

Carl-Peter Zickerman, who provides consultancy services to the Company (and was employed prior to 1 February 2016 as Executive VP and Head of Strategic Investments), is a Board Member and the son of Carl-Gustav Zickerman, who controls 89,201,797 Shares. The Company does not believe the family relations will negatively impact the efficient working of the Board or the Company.

Other than as described above, there are no potential conflicts of interest between any duties to the Company of the members of the Board or the Company's Management, and their private interests or other duties.

During the last five years preceding the date of this Prospectus, no member of the Board of Directors or the Management has:

any convictions in relation to indictable offences or convictions in relation to fraudulent offences;

received any official public incrimination and/or sanctions by any statutory or regulatory authorities (including designated professional bodies) or ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company; or

been declared bankrupt or been associated with any bankruptcy, receivership or liquidation in his capacity as a founder, director or senior manager of a company.

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11. RELATED PARTY TRANSACTIONS

11.1 Related party transactions during the financial year 2013

The Group had no major transactions with related parties during the year ended 31 December 2013.





11.4 Related party transaction during the financial year 2016

With effect from 1 February, 2016, Polarcus DMCC entered into a consultancy agreement with Zickerman Group Consulting DMCC, a company controlled by Carl-Peter Zickerman, who became a Board Member at the 2016 AGM (See Section 10.2.1, Table for detail of director remuneration). Consulting fees totalling USD 492,729 were paid to Zickerman Group Consulting DMCC in 2016. Prior to the commencement of the consultancy contract, Mr. Zickerman was employed by the Company as Executive VP and Head of Strategic Investments (See Section 10.3.2 Table footnote 4 for detail of employment remuneration). Mr. Zickerman also owns 89,201,798 Shares through his wholly owned company Zickerman Group Ltd.

The Group had no other major transactions with related parties during the twelve-month period ended 31 December 2016.

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12. CORPORATE INFORMATION AND DESCRIPTION OF THE SHARE CAPITAL

12.1 General corporate information

The Company's registered name is Polarcus Limited. The Company is an exempted company validly incorporated with limited liability in the Cayman Islands, is registered with the Cayman Islands Registrar of Companies with registration number 201867 and regulated by the Companies Law. The Company was incorporated on 17 December 2007. Polarcus Limited's registered office is c/o Walkers Corporate Limited, Cayman Corporate Center, 27 Hospital Road, George Town, Grand Cayman KYI-9008, Cayman Island. Polarcus Limited is the holding company of the Polarcus Group.

The business headquarter of the Company is in Dubai, UAE. The Company's registered office is located at Almas Tower, Level 32, Jumeirah, Lakes Towers, PO Box 283373, Dubai and the Company's telephone number at that address is +97144360800 and its fax number is +971 4 43 60 808. The Company's website can be found at www.polarcus.com.The contents of www.polarcus.com is not incorporated by reference into or otherwise forms part of this Prospectus.

The majority of the offshore crew of the Polarcus Group vessels are employed by Polarcus Limited. As of 31 December 2016 the Company had 335 employees. Polarcus Limited's Shares are registered on the Oslo Stock Exchange with ticker symbol "PLCS".

12.2 Shares and share capital

The following description includes certain information concerning the Company's share capital, a brief description of certain provisions contained in the Company's Articles of Association as they are in effect as of the date of this Prospectus and a brief description of certain applicable Cayman Islands law and certain provisions under the Norwegian Securities Trading Act. The summary does not purport to be complete and is qualified in its entirety by the Company's Articles of Association, Cayman Islands law and Norwegian law. Any change in the Articles of Association is subject to approval by a Special Resolution of the Company's Shareholders.

12.2.1 General

The Company's issued share capital is USD 15,304,729.47 divided into 1,530,472,947 Shares each with a nominal or par value of USD 0.01, all fully paid and issued in accordance with Cayman Islands law. Other than the New Shares, all the issued Shares are in registered form and are registered with the Norwegian Central Securities Depository ("VPS") register with ISIN KYG7153K1085. The New Shares are in registered form and are registered with VPS with ISIN KYG7153K1572 as a temporary ISIN until after the publication of this Prospectus. The Registrar of the Company is DnB Bank ASA, Verdipapirservice, Dronning Eufemias gate 30, 0191 Oslo.

The Company has one class of shares in issue. All Shares carries equal rights in all respects and all issued Shares have a par value of USD 0.01 each. One Share entitles the holder to one vote at the annual and extraordinary shareholder meetings of the Company.

The Company's Class B shares is an unissued share class which is a part of the Company's authorised share capital. The Class B Shares have a nominal or par value of USD 0.0013. The Class B Shares have equal rights in all respects, including in respect to voting and dividends, as the Company's issued Shares.

12.2.2 Share capital development

The Company was incorporated on 17 December 2007 with an authorized share capital of USD 50,000 divided into 5,000,000 Shares of par value USD 0.01 each of which one Share was issued at the same date.



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On 9 February 2008 the Company increased its authorized share capital to USD 1,000,000 divided into 100,000,000 Shares of par value USD 0.01 each. At the same date a total of 49,999,999 Shares were issued by the Board of Directors of the Company in favour of certain initial investors in the Company at USD 1 per Share, resulting in an issued share capital of USD 500,000 divided into 50,000,000 Shares of par value USD 0.01 each.

On 18 March 2008 the Company further increased its authorized share capital to USD 1,700,000 divided into 170,000,000 Shares of par value USD 0.01. At the same date a total of 3,786,855 Shares were issued by the Board of Directors of the Company in favour of certain initial investors in the Company at a subscription price of USD 1 per Share, resulting in an issued share capital of USD 537,868 divided into 53,786,855 Shares of par value USD 0.01.

On 19 May 2008 the Company increased its authorized share capital to USD 2,137,868.55 divided into 213,786,855 Sh–res of par value USD 0.01. O– 19 - 20 May 2008 the Board of Directors of the Company issued a total of 105,000,000 Shares at a subscription price of USD 1 per share in favour of Drydocks World LLC, Ulstein Shipping AS, certain founders and certain individual investors, resulting in an issued share capital of USD 1,587,868.55 divided into 158,786,855 Shares of par value USD 0.01 each.

On 20 June 2008 the Company increased its authorized share capital to USD 5,637,868.55 divided into 563,786,855 Shares of par value USD 0.01 each.

On 29 June 2008 a total of 2,785,000 Shares were issued by the Board of Directors of the Company in favour of certain employees of Drydocks World Dubai LLC, employees of the Polarcus Group and the Board of Directors of Polarcus at a subscription price of USD 1 per Share, resulting in an issued share capital of USD 1,615,718.55 divided into 161,571,855 Shares of par value USD 0.01 each.

On 2 July 2008, the Company completed a USD 50,400,000 private placement towards certain professional and institutional investors by the issue of 42,000,000 Shares at a subscription price of USD 1.20 per Share, resulting in an issued share capital of USD 2,035,718.55 divided into 203,571,855 Shares of par value USD 0.01 each.

On 11 September 2009, the Company increased its authorized share capital to USD 7,040,000 divided into 704,000,000 Shares of par value USD 0.01. Immediately thereafter the Company consolidated the 203,571,855 issued Shares of par value USD 0.01 each into 101,785,927.50 issued Shares of par value USD 0.02 each and the 500,428,145 authorised but unissued Shares of par value USD 0.01 each into 250,214,072.50 authorised but unissued Shares of par value USD 0.02 each. Shareholders holding an odd number of Shares as of 11 September 2009 were rounded up in the consolidation to mitigate fractions of Shares. Consequently, the Company issued 3.5 new Shares on 17 September 2009 with a par value USD 0.02 each, resulting in an issued share capital of USD 2,035,718.62 divided into 101,785,931 Shares of par value USD 0.02 each.

In the IPO completed on 30 September 2009 Polarcus issued 161,388,889 Shares with par value of USD 0.02 resulting in an issued share capital of USD 5,263,496.40 divided into 263,174,820 Shares.

On 27 April 2010 the Company increased its authorized share capital to USD 11,190,000 divided into 559,500,000 Shares of par value USD 0.02.

On 19 October 2010 Polarcus issued 67,421,359 Shares in connection with a private placement each with par value of USD 0.02 resulting in an issued share capital of USD 6,611,923.58 divided into 330,596,179 Shares.

On 18 November 2010 Polarcus issued 73,400,000 Shares in connection with a private placement each with par value of USD 0.02 resulting in an issued share capital of USD 8,079,923.58 divided into 403,996,179 Shares.

On 10 December 2010 Polarcus issued 5,700,000 Shares in connection with a subsequent

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offering each with par value of USD 0.02 resulting in an issued share capital of USD 8,193,923.58 divided into 409,696,179 Shares.


On 11 October 2011 Polarcus issued 57,500,000 Shares in connection with a private placement each with par value of USD 0.02 resulting in an issued share capital of USD 9,343,924 divided into 467,196,179 Shares.

On 20 March 2012 Polarcus issued 40,000,000 Shares in connection with a private placement each with par value of USD 0.02 resulting in an issued share capital of USD 10,143,923.58 divided into 507,196,179 Shares.


On 20 March 2013 Polarcus issued 25,000 Shares in connection with exercise of options each with par value of USD 0.02 resulting in an issued share capital of USD 10,144,423.58 divided into 507,221,179 Shares.

On 13 May 2014 the Company increased its authorized share capital to US$13,770,000 divided into 688,500,000 Shares of par value US$ 0.02.

On 20 October 2014 the Company increased its authorized share capital to US$18,570,000 divided into 928,500,000 Shares of par value US$ 0.02.



On 22 November 2015 Polarcus issued 1 new share with a par value USD 0.02 to mitigate fractions of shares in connection with a consolidation of the Company's Shares, resulting in an issued share capital of USD 13,396,273.60 divided into 669,813,680 Shares of par value USD 0.02 each.

On 22 November 2015 the Company consolidated the 669,813,680 issued Shares of par value USD 0.02 each into 66,981,368 issued Shares of par value USD 0.2 each and the 258,656,320 authorised but unissued Shares of par value USD 0.02 each into 25,868,632 authorised but unissued Shares of par value USD 0.2 each.

On 9 March 2016 the Company issued 463,491,579 Class B Shares of a nominal or par value of USD 0.0013 per share. The Class B Shares were issued to the Company's existing bondholders in connection with the 2016 Restructuring.

On 13 April 2016 the Extraordinary General Meeting resolved to repurchase all of the issued Class B Shares in consideration for the issue of an equal number of Shares, at their par value, to current holder of the Class B Shares.

On 12 May 2016, the Annual General Meeting resolved to reduce the nominal value of each ordinary Share from USD 0.20 to USD 0.01 by cancelling share capital to the extent of USD 0.19 per issued Share.

On 6 March 2017 Polarcus issued 1,000,000,000 Shares in connection with the Private Placement each with par value of USD 0.01 resulting in an issued share capital of USD 15,304,729.47 divided into 1,530,472,947 Shares.

A summary of the share capital development is presented in the table below.

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Date Type of change in capital

Change in issued share capital (USD)

Changes in number of shares

No of shares following change

Subscription price per share

Nominal or par value per share (USD)

Issued Share capital following increase (USD)

17-Dec-07 Incorporation 0.01 1 1 USD 1 0.01 0.01

09-Feb-08 Private placement initial Shareholders

499,999.99 49,999,999 50,000,000 USD 1 0.01 500,000.00

18-Mar-08 Private placement initial Shareholders

37,868.55 3,786,855 53,786,855 USD 1 0.01 537,868.55

19-May-08 Private placement initial Shareholders

1,050,000.00 105,000,000 158,786,855 USD 1 0.01 1,587,868.55

29-Jun-08 Private placement Polarcus and DWD employees and Polarcus Board

27,850.00 2,785,000 161,571,855 USD 1 0.01 1,615,718.55

02-Jul-08 Private placement initial Shareholders

420,000.00 42,000,000 203,571,855 USD 1.2 0.01 2,035,718.55

11-Sep-09 Share consolidation (2:1) and issuance of 3.5 shares to avoid fractions of shares

0.07 Reduction due to share

consolidation. -

101,785,927.50 Issuance to

avoid fraction of shares

101,785,931 NA 0.02 2,035,718.62

28-Sep-09 IPO 3,227,777.78 161,388,889 263,174,820 NOK 4.5 0.02 5,263,496.40

19-Oct-10 Private placement 1,348,427.18 67,421,359 330,596,176 NOK 5.15 0.02 6,611,923.58

19-Nov-10 Private placement 1,468,000.00 73,400,000 403,996,179 NOK 5.30 0.02 8,079,923.58

10-Dec-10 Subsequent offering

114,000.00 5,700,000 409,696,179 NOK 5.15 0.02 8,193,923.58

11-Oct-11 Private placement 1,150,000 57,500,000 467,196,179 NOK 4.00 0.02 9,343,924.58

20-Mar-12 Options exercised 800,000 40,000,000 507,196,179 NOK 3.58 0.02 10,143,923.58

20-Mar-13 Options exercised 500.00 25,000 507,221,179 NOK 3.58 0.02 10,144,423.58

07-Oct-14 Private placement 2,864,776.42 143,238,821 650,460,000 NOK 1.40 0.02 13,009,200.00

21-Oct-14 Private placement 387,073.58 199,353,679 669,813,679 NOK 1.40 0.02 13,396,273.58

23-Nov-15 Reverse split 0 Reduced by 602,832,311

shares

66,981,368 - 0.2 13,396,273.6

09-Mar-16 Issuance of Class B shares

602,539.05 463,491,579 530,472,947 USD 0.0013 0.0013 for Class B Shares

13,998,812.65

13-Apr-16 Repurchase of Class B Shares

Reduced by 602,539.05

Reduced by 463,491,579

shares

66,981,368 - 0.0013 for Class B Shares

13,396,273.6

13-Apr-16 Issuance of ordinary Shares as consideration in the repurchase of Class B Shares

92,698,315.80 463,491,579 530,472,947 - 0.2 106,094,589.4

22-May-16 Reduction in par value

Reduced by 100,789,859.93

0 530,472,947 - 0.01 5,304,729.47

08-Mar-17 Issuance of New Shares

10,000,000 1,000,000,000 1,530,472,947 NOK 0.33 0.01 15,304,729.47

12.2.3 Board authorizations

As of the date of this Prospectus, the Company has an authorized share capital of USD 19,567,097.7956 divided into 1,878,341,579 Shares of par value USD 0.01 and 602,832,312 Class B Shares of par value USD 0.0013. As of the date of this Prospectus,

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USD 15,304,729.47 of the authorized share capital has been issued, representing 1,530,472,947 Shares of par value USD 0.01 each. The Board of Directors of the Company is authorized to distribute the remaining authorized share capital of USD 3,478,686.32 representing 347,868,632 Shares of par value USD 0.01 each. Of the 347,868,632 authorised, unissued Shares, 4,275,000 Shares have been reserved for the Polarcus Group's employee option schemes and up to 4,609,072 Shares for issue in relation to the Company's convertible bonds. The number of Shares reserved for the convertible bonds is based on the current status and are subject to standard adjustment mechanisms following rights issues, dividends, reset mechanism and other adjustments.

The remaining 347,868,632 authorized Shares may be issued by the Board of Directors to provide flexibility with regard to future equity capital injections, in order, for example, to maintain adequate equity levels and working capital and to make provision for raising capital for the exercise of the call options in relation to the Company's bonds as well as for general corporate purposes.

With regard to the 602,832,312 Class B shares of par value USD 0.0013, under Cayman Islands law, the Board of Directors is authorized to distribute these shares. However, given that these shares were originally authorized, issued and repurchased in connection with the Restructuring, the Board of Directors would seek a fresh mandate from the shareholders before distributing these shares again.

12.2.4 Convertible bond loans

The Company's outstanding convertible loan is described in Section 9.8.3 "Operating and financial information—Summary of financing—2.875% Convertible Bond Issue 2011/2016" above.

12.2.5 Share options

The Company currently operates four employee share option plans. The data in this subsection is adjusted to reflect the consolidation of the Company's Shares that took place on 22 November 2015.

2010 Employee Share Option Scheme

In 2010, following AGM approval, the Company implemented a share option plan ("2010 Plan") under which a maximum of 750,000 options could be granted to employees of companies within the Polarcus Group.

The exercise price for each option is based on the weighted average price for which the shares have been traded at Oslo Stock Exchange in the period of 30 trading days immediately prior to the date the options were granted plus 10% for options exercisable after one year, 20% for options exercisable after two years and 30% for options exercisable thereafter.

The 2010 Plan has a six-year duration and phased vesting with part exercise possibility at the first, second and third anniversary after the grant date. The aggregate number of options granted to a particular employee when multiplied by the volume weighted average trading price 30 days prior to the grant date cannot exceed 150% of the employee's base salary each year and 300% of base salary in aggregate during the duration of the plan.

The options are exercisable upon a change of control event (above 50%).

As of 31 December 2016, 164,100 options were outstanding under this plan of which 20,000 options had been granted to members of the managementduring the relevant period. The weighted average exercise price is NOK 93.23 per option. No members of the management have exercised any options granted under this plan. No further options will be issued under this plan and the plan will expire in its entirety in April 2017.

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In 2012, following AGM approval, the Company implemented a share option plan ("2012 Plan") under which a maximum of 1,400,000 options could be granted to employees of the companies within the Polarcus Group.

The exercise price for each option is based on the weighted average price for which the shares have been traded at Oslo Stock Exchange in the period of 30 trading days immediately prior to the date the options were granted.

The 2012 Plan has a five-year duration from the grant date. The options vest three years after the grant date and can be exercised up to five years after the grant date.

The exercise of the options is conditional upon the market price of the shares (defined as the weighted average price for which the shares have been traded at Oslo Stock Exchange in the previous period of 30 trading days) exceeding the exercise price by at least 30% at one time during the exercise period. In addition, the exercise of the options is conditional upon the employee completing three years of service (the vesting period), and being an employee of the Group at the exercise date.


As of December 31, 2016, 1,145,500 options were outstanding under this plan of which 87,000 options had been granted to members of the management during the relevant period. The weighted average exercise price is NOK 50.58 per option. No members of the management have exercised any options granted under this plan. No further options will be issued under this plan and the plan will expire in its entirety in May 2019.


In 2014, following AGM approval, the Company implemented a share option plan ("2014 Plan') under which a maximum of 1,500,000 options could be granted to employees of companies within the Polarcus Group.

The exercise price for each option is based on the weighted average price for which the shares have been traded at Oslo Stock Exchange in the period of 30 trading days immediately prior to the date the options were granted.

The 2014 Plan has a seven-year duration from the grant of the options, with part exercise possibility at the second, third and fourth anniversary after the grant of the options.

The exercise of the options is conditional upon the market price of the shares (defined as the weighted average price for which the shares have been traded at Oslo Stock Exchange in the previous period of 30 trading days) exceeding the exercise price by at least 30% at one time during the option period.


As of December 31, 2016, 1,370,000 options were outstanding under this plan of which 335,000 options had been granted to members of the management during the relevant period. The weighted average exercise price is NOK 24.79 per option. No members of the management have exercised any options granted under this plan. The remaining options of this plan may be issued subject to approval by the Board of Directors before 1 June 2017.


In 2016, following AGM approval, the Company implemented a share option plan ("2016 Plan") under which a maximum of 16,000,000 options could be granted to employees of companies within the Polarcus Group.

The exercise price for each option is based on the weighted average price for which the shares have been traded at Oslo Stock Exchange in the period of 30 trading days immediately

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prior to the date the options were granted.

The 2016 Plan has a seven-year duration from the grant of the options, with part exercise possibility at the second, third and fourth anniversary after the grant of the options.

The exercise of the options is conditional upon the market price of the shares (defined as the weighted average price for which the shares have been traded at Oslo Stock Exchange in the previous period of 30 trading days) exceeding the exercise price by at least 30% at one time during the exercise period.


As of December 31, 2016, 15,275,000 options were outstanding under this plan of which 3,250,000 options has been granted to members of Management. The weighted average exercise price is NOK 0.79 per option. No members of Management have exercised any options granted under this plan. The remaining options of this plan may be issued subject to approval by the Board of Directors.

12.2.6 Dilutive effect of convertibles and options

Assuming full conversion of convertible debt and share options, the total number of Shares issued would increase by 25,294,226 Shares.

Dilutive instrument Number of equivalent Shares

Shares associated with convertible debt 7,339,626

Shares associated with outstanding stock options as of 31 December 2016

17,954,600

Total 25,294,226

The number of Shares reserved for the convertible debt is based on the current status and are subject to standard adjustment mechanisms to the conversion price following rights issues, dividends, the reset mechanism and other adjustments.

The 17,954,600 issued and outstanding options in the four different share option plans as of 31 December 2016 have an average exercise price of approximately NOK 6.64 per option as described in Section 12.2.5 "Corporate information and description of the share capital - Shares and share capital - Share options".

12.2.7 Own Shares

As of the date of this Prospectus, the Board of Directors does not hold authorizations for the Company to acquire its own Shares, and neither the Company nor any of its subsidiaries own any Shares.

As of the date of this Prospectus, the aggregate number of treasury Shares held by Polarcus is 1,310, each with a nominal or par value of USD 0.01. The book value of the treasury shares was USD 563 at 31 December 2016.

Pursuant to the Articles of Association, the Company may acquire, for valuable consideration (determined by the Board of Directors), Shares in its own share capital if and in so far as approved by ordinary resolution by the general meeting of shareholder of the Company, including acquisitions as a defence mechanism in a potential buy-out situation or a change of control situation in the Company. The authorization shall be given for a specific number of Shares and for a specific period of time. Furthermore, the Company may, without being authorized thereto by the general meeting, acquire Shares in its own share capital (at prevailing market value and on such other terms as the directors shall determine) in order to transfer those Shares to the employees of the Company or a Polarcus Group company under a scheme applicable to such employees.

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12.2.8 Share price development

The Shares have been publicly traded on Oslo Axess and thereafter Oslo Børs under the trading symbol "PLCS" since the IPO on 30 September 2009. In addition, the New Shares have been listed and tradeable on Merkur Markets, with ticker code "PLCS-ME" under a separate ISIN number being KYG7153K1572 for the period between issuance of the New Shares and the approval of this Prospectus.

The Share price performance, since 1 January 2016, on Oslo Axess/Oslo Børs and Merkur Markets is shown in the graph below:

12.2.9 Primary insider purchases

This section provides a description of trading in the Shares done by the primary insiders in the course of the last 12 months before the date of this Prospectus.

On 12 May 2016, Roderick Starr (former CEO) acquired shares at an average price of NOK 0.60 per share. Following the transaction, he holds 440,000 Shares.

Options granted to the Management are described in Section 10.3.2. In addition to the options described in Section 10.3.2, certain board members participated in the Private Placement at the same subscription price (NOK 0.33) as in the Offering.

The following primary insiders participated in the Private Placement:

Chairman of the Board Peter Rigg was allocated 750,000 Shares in the Private Placement. After the completion of the Private Placement, he holds a total of 793,488 Shares, corresponding to 0.05% of the issued share capital.

Board member Carl-Peter Zickerman (through his wholly owned company Zickerman Group Ltd), was allocated 30,300,000 shares in the Private Placement. After the completion of the Private Placement he holds a total of 89,201,798 Shares, corresponding to 5.8% of the issued share capital.

Board member Tom Henning Slethei (through his wholly owned company Alto Holding AS), was allocated 30,000,000 shares in the Private Placement. After the completion of the Private Placement he holds a total of 47,430,114 Shares, corresponding to 3.1% of the issued share capital.

Board member Erik Mathiesen (through his wholly owned company SISU Holding AS), was allocated 750,000 shares in the Private Placement, subject to completion of the Private Placement he holds a total of 750,000 Shares, corresponding to 0.05% of the issued share capital after completion of the Private Placement.

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12.2.10 Shareholder structure

As of 14 March 2017, the Company had approximately 3,400 holders of its Shares registered in the VPS. The following table provides an overview of the 20 largest shareholders. The list is consolidated for the two ISINs.

Shareholder Account type Shares Ownership 1 J.P. MORGAN SECURITI Nominee 227,502,572 15% 2 SKANDINAVISKA ENSKIL Nominee 109,877,030 7%

3 J.P. MORGAN SECURITI Nominee 100,000,000 7% 4 ABG SUNDAL COLLIER A Ordinary 60,600,000 4% 5 UBS SWITZERLAND AG Nominee 54,706,194 4% 6 VERDIPAPIRFONDET STO Ordinary 50,000,000 3% 7 ALTO HOLDING AS Ordinary 47,430,114 3% 8 KRISTIAN FALNES AS Ordinary 45,809,409 3% 9 VERDIPAPIRFONDET PAR Ordinary 44,594,595 3%

10 GOLDMAN, SACHS & CO. Nominee 44,429,026 3% 11 JPMORGAN CHASE BANK, Nominee 34,906,026 2% 12 VERDIPAPIRFONDET PAR Ordinary 30,405,405 2% 13 THE BANK OF NEW YORK Nominee 30,000,000 2% 14 THE BANK OF NEW YORK Nominee 30,000,000 2% 15 INAK 3 AS Ordinary 30,000,000 2% 16 CLEARSTREAM BANKING Nominee 29,487,249 2% 17 MORGAN STANLEY & CO. Nominee 27,505,161 2% 18 CREDIT SUISSE SECURI Nominee 26,166,330 2% 19 STOREBRAND VERDI VER Ordinary 25,000,000 2% 20 EUROCLEAR BANK S.A./ Nominee 20,586,216 1%

The major shareholders of the Company are defined as shareholders holding more than 5% of the Company's share capital. In accordance with the disclosure requirements under the Norwegian Securities Trading Act, shareholders acquiring ownership to or control more than certain levels of the share capital, including 5%, of a company listed on Oslo Børs must notify the stock exchange immediately. See also Section 12.2.27 "—Shareholder matters" for more information on the disclosure requirements.

The Company is not aware of any persons or entities, except for those set out below, who, directly or indirectly, have an interest of 5% or more of the Shares as of the date of this Prospectus. The following persons or entities have notified of an interest of 5% or more of the Shares in the Company:

Carl-Gustav Zickerman (through his wholly owned company Zickerman Holding Ltd), has holdings corresponding to a total of 89,201,797 Shares, corresponding to 5.8% of the issued share capital.

Board Member Carl-Peter Zickerman (through his wholly owned company Zickerman Group Ltd), who notified on 10 February 2017 that he held holdings corresponding to a total of 89,201,798 Shares, corresponding to 5.8% of the issued share capital.

Bybrook Capital LLP, who gave notice on 8 March 2017 that they, through Bybrook Capital Master Fund LP and Bybrook Capital Hazelton Master Fund LP, aggregately held holdings corresponding to a total of 220,416,926 Shares, corresponding to 14.4% of the issued share capital. Each of Bybrook Capital Master Fund LP and Bybrook Capital Hazelton Master Fund LP individually holds shares correspondning to 7.2% of the issued share capital.

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Pareto Asset Management AS, who gave notice on 13 March 2017 that fund managed by them aggregately held holdings corresponding to a total of 84,344,300 Shares, corresponding to 5.5% of the issued share capital.

In addition, the following nominee accounts hold more than 5% of the Shares outstanding. These accounts may represent one or more individual investors which may or may not include the above mentioned entities and persons.

Skandinaviska Enskilda Banken nominee account has holdings corresponding to a total of 109,877,030 Shares, corresponding to 7.2% of the issued share capital

J.P. Morgan Securities nominee account has holdings corresponding to a total of 227,502,572 Shares, corresponding to 14.8% of the issued share capital.

A separate J.P. Morgan Securities nominee account has holdings corresponding to a total of 100,000,000 Shares, corresponding to 6.5% of the issued share capital.

All the Shares have equal voting rights. Thus, all major Shareholders have the same voting rights relative to the number of Shares held, each Share carries one vote.

The Company is not aware that the Company is controlled or owned, directly or indirectly, by any Shareholder or related Shareholders. Certain of the Shares of the Company were earlier subject to a shareholder agreement; however, this agreement automatically lapsed at the delivery of the Company's sixth vessel in August 2011.

12.2.11 Registration of Shares

The Shares are registered electronically in book-entry form with VPS under the International Securities Identification Number ("ISIN") KYG7153K1085. The New Shares will be registered with the same ISIN with the effect from the date of this Prospectus.

The registrar for the Shares in Norway is DnB Bank ASA, Verdipapirservice, Dronning Eufemias gate 30, 0191 Oslo (the "VPS Registrar").

12.2.12 Dividend policy

Polarcus is committed to maximizing shareholder value, by inter alia declaring dividends to the Shareholders from its profit. However, the Company is restricted from declaring dividends under its loan facility and bonds as further described in more detail in Section 9.8.1 "Operating and financial information—Summary of financing—Summary of financing".

Polarcus has not issued any dividends in the Company's history.

12.2.13 Memorandum and Articles of Association

The Articles of Association as adopted by Special Resolution dated 22 November 2015 (and last amended in relation only to the description in the Memorandum of Association of the authorised share capital by ordinary resolution dated 6 March 2017) are incorporated by reference to this Prospectus, http://www.polarcus.com/en-us/articles-of-association/articles-of-association.php, see Section 15.2 "Additional information—Incorporation by reference". The summary of the Articles set out below is given for general background information purposes only, and should not be construed as legal advice. Each Shareholder is responsible for seeking separate legal advice to the extent necessary.

12.2.14 Objects and purposes

In accordance with paragraph 3 of the Memorandum of Association, the objects for which the Company is established are to carry on, undertake, engage or invest, directly or indirectly, by itself or through subsidiaries or part-owned companies, partnerships or other forms of entities, on a worldwide basis, in any commercial activity within the international oil and oil services business, including oil and gas exploration, production and participation, seismic data

http://www.polarcus.com/en-us/articles-of-association/articles-of-association.php

http://www.polarcus.com/en-us/articles-of-association/articles-of-association.php

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services and general offshore energy related business, and whatever else may be considered incidental or conductive thereto, including without limitation the acquisition, construction, equipment, leasing, chartering, operation, agency and manning of any kind of vessels and everything incidental thereto, and the Company shall have full power and authority to carry out any other project not prohibited by the Companies Law.

12.2.15 Provisions with respect to members of administrative, management and supervisory bodies

The Articles of Association contains provisions relating to the appointment of directors in articles 104-107, and proceedings of directors in articles 109-116. Furthermore, the Articles of Association contain provisions regarding the appointment of committees of the Board (such as the nomination committee) in article 129. Articles 133-138 include provisions concerning alternate directors and the right for a Director to appoint an alternate director.

In general, the Board of Directors may exercise all such powers of the Company that are not, by the Companies Law or the Articles of Association, required to be exercised by the general meeting of Shareholders.

12.2.16 Description of Shares

The Company has one class of issued shares. The Shares have a par value of USD 0.01 each and are equal in all other respect. One Share entitles the holder to one vote at the annual and extraordinary shareholder meetings of the Company.

The Company's Class B shares are an unissued share class which is a part of the Company's authorised share capital. The Class B Shares have a nominal or par value of USD 0.0013. The Class B Shares have equal rights in all respects, including in respect of voting and dividends, as the Company's issued Shares.

12.2.17 Actions required to change rights of holders of Shares

The rights attached to any Share (unless otherwise provided by the terms of issue of the Shares) may, whether or not the Company is being wound up, be varied with the consent in writing of the holders of three-quarters of the issued Shares, or with the sanction of a special resolution passed by a three quarter majority at a general meeting of the holders of the Shares.

12.2.18 General meeting

Through their ability to vote in the Shares at a the general meeting or otherwise, the Shareholders of the Company are, collectively, able to exercise authority over Polarcus, subject to the provisions of the Articles of Association and of the Companies Law.

All Shareholders are entitled to attend and vote at general meetings of the Company, either in person, by proxy or by duly authorized representative.

General meetings are convened by the Board of Directors. General meetings shall furthermore be convened by the Board at the request of any director, the auditor or a Shareholder or Shareholders holding at the date of such request not less than five per cent of the issued and paid-up share capital. A notice of an annual general meeting shall be given at least 14 clear days before the date of the meeting and a notice for any other general meetings shall be given at least 7 clear days before the date of the meeting. The notice of the general meeting shall include an agenda for the meeting. The annual general meeting shall be held within six months from the end of each financial year. The annual general meeting shall deal with and decide on the adoption of the annual financial statement and annual report, the question of declaring dividend, election of directors to the Board of Directors and their remuneration, appointment of an auditor and its remuneration and such other matters as may be set out in the notice for the meeting.

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As Polarcus is listed on Oslo Børs and complies with the Norwegian Corporate Governance Code, Polarcus intends, where practically possible (i.e. unless there are exceptional circumstances), to call all general meetings with 21 days advance notice.

12.2.19 Voting rights

On a show of hands every Shareholder who (being an individual) is present in person or by proxy or, if a corporation or other non-natural person is present by its duly authorized representative or proxy, shall have one vote and on a poll every Shareholder shall have one vote for every Share of which in he is the holder.

In the case of joint holders of record the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the Register of Shareholders. Decisions of the general meeting require a simple majority of the votes unless otherwise laid down in the Articles of Association or the Companies Law. In the case of election of directors to the Board of Directors, the Shareholders may by simple majority of the votes appoint any person to be a director, however, where a director is sought to be appointed outside the general meeting normally appointing directors, such decision requires a Special Resolution. An increase of the authorized share capital requires simple majority.

Certain decisions, including resolutions to consolidate and divide the share capital, to subdivide the authorised share capital into Shares of higher or lower par value, to amend the Articles of Association, or to reduce the share capital must receive the approval of Special Resolution.

On a poll or on a show of hands votes may be cast either personally or by proxy. A Shareholder may appoint up to two proxies or the same proxy under one or more instruments to attend and vote at a meeting. Where a Shareholder appoints more than one proxy the instrument of proxy shall state which proxy is entitled to vote on a show of hands.

A Shareholder holding more than one Share need not cast the votes in respect of his Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain from voting.

In order to be entitled to vote, a Shareholder must be registered as the legal owner of the Shares in the Register of Shareholders of the Company. The directors may fix in advance or arrears a date as the record date for the determination of Shareholders entitled to vote at any general meeting. Pursuant to the Articles of Association, if no record date is fixed for the determination of Shareholders entitled to vote at a general meeting, the date on which the notice of the meeting is sent shall be the record date for such determination of Shareholders. The directors of Polarcus will ensure that a record date is fixed in accordance with any applicable rules and regulations.

12.2.20 Restriction on ownership and transfer of Shares

The Shares are freely transferable.

However, in order to protect Norwegian Shareholders from taxa–ion based on the Norwegian N–KUS -regulations, the Articles of Association allows the Board to decline to register the transfer of a Share where such transfer would, in the opinion of the Board, be likely to result in 50% per cent or more of the aggregate issued share capital of the Company, or Shares of the Company to which are attached 50% per cent or more of the votes attached to all issued Shares of the Company, being held or owned directly or indirectly by individuals or legal persons resident for tax purposes in Norway or, alternatively, such Shares being effectively connected to a Norwegian business activity, or the Company otherwise being deemed a

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"controlled foreign company" as such term is defined pursuant to Norwegian tax legislation. For further details regarding the Norwegian NOKUS-regulations, please see Section 14.1.6 "TAXATION—Introduction—Norwegian CFC-legislation".

There are no limitations under the Companies Law on the rights of non-residents or foreign owners to hold or vote Polarcus Shares.

There are no pre-emption rights on the issue or transfer of Shares.

12.2.21 Additional issuances

All Shares for the time being unissued shall be under the control of the Board of Directors who may:

issue, allot and dispose of Shares to such persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine, including the issue, allotment and disposal of the same (at a market value determined by the directors in their discretion) as a defence mechanism in connection with a potential buy-out situation or a change of control situation in relation to the Company; and

grant options with respect to such Shares and issue warrants or similar instruments with respect thereto, and for such purposes, the Board of Directors may reserve an appropriate number of Shares for the time being unissued.

There are no pre-emption rights on the issue of Shares in favour of existing Shareholders. However, the Board of Directors is pursuant to the Company's corporate governance commitments committed to limiting the level of dilution of existing Shareholders. The commitments provide that the Company, in the event of a share offering, will carefully consider the purpose and need for new equity, the urgency of such equity, the strategic positioning between the Company and the new shareholders towards which the offering is directed, the offer price, the financial market conditions and the need for compensating existing Shareholders.

12.2.22 Dividends

Under the Companies Law, the Company may only make distributions by way of dividend out of profits or, provided that immediately following the date that the dividend is proposed to be paid the Company is able to pay its debts as they fall due in the ordinary course of business, out of its share premium account.

Any proposal to pay a dividend, and the amount of the dividend, must be recommended by the Board and approved by the Shareholders by simple majority vote in a general meeting. The Shareholders may vote to reduce (but not to increase) the dividends proposed by the Board. The Board may, if approved by the Shareholders by simple majority vote in a general meeting, distribute Shares, credited as fully paid, instead of cash in respect of the whole (or some part, to be determined by the directors) of any of the dividends.

The Shareholders do not have an absolute entitlement to an annual share in the Company's profits (form of "obligatory" dividends).

The Board may fix in advance or arrears a date as the record date for the determination of Shareholders entitled to receive payment of any dividend. If no record date is fixed for the determination of Shareholders entitled to receive payment of a dividend, the date on which the resolution of the directors declaring such dividend is adopted shall be the record date for such determination of Shareholders. There is no fixed date or time limit on which entitlement to dividends (if any) arises.

The directors may deduct from any dividend or distribution payable to any Shareholder all sums of money (if any) then payable by such Shareholder to the Company on account of calls or otherwise. Any dividend which cannot be paid to a Shareholders and/or which remains

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unclaimed after six months from the date of declaration of such dividend may, in the discretion of the directors, be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect of that account and the dividend shall remain as a debt due to the Shareholder. Any dividend which remains unclaimed after a period of six years from the date of declaration of such dividend shall be forfeited and shall revert to the Company. There are no procedures for payment of dividends to non-resident Shareholders. Any furture payments of dividends on the Shares to non-resident Shareholders will be denominated in NOK, and will be paid to the Shareholders through the VPS.

The Company is subject to dividend restrictions under its applicable financing arrangements as further described in Sections 9.8.2, 9.8.4 and 9.8.5.

12.2.23 Provisions preventing change of control

The Articles of Association provide the Board of Directors with the power to issue Shares (at a market value determined by the directors in their discretion) as a defense mechanism in connection with a potential buy-out situation or a change of control situation in relation to the Company. Furthermore, the Articles of Association also empower the Company, subject to the provisions of the Companies Law and any applicable listing rules, to acquire, for valuable consideration (determined by the directors), Shares in its own share capital and in so far as approved by Shareholders, including acquisitions as a defence mechanism in a potential buy-out situation or a change of control situation in the Company.

Please also see Section 12.2.20 "—Restriction on ownership and transfer of Shares".

Other than as set out above, there are no other provisions in the Articles of Association that serve as a mechanism to delay, defer or prevent a change of control of the Company.

12.2.24 Mandatory takeover, squeeze-out and sell-out provisions applicable for the Shares

The Companies Law currently contains two methods by which a third party might effect the acquisition of the shares of a Cayman Islands company. The Companies Law contains squeeze-out provisions that enable an offeror to acquire 100% of the shares in a Cayman Islands company in specific circumstances where a takeover offer made by the offeror is approved by holders of not less than 90% in value of the shares affected. Any takeover offer applicable to the Company will be subject to the tender offer rules of Oslo Børs.

The Companies Law also provides for a court-supervised scheme of arrangement which will result in the acquisition of either all or none of the shares of the Cayman Islands company. A scheme of arrangement would require the approval of a majority in number representing 75% in value of the shareholders who attend and vote in person or by proxy at a court directed meeting of the company, and the sanction of the Grand Court of the Cayman Islands.

Other than as set out above, the Companies Law does not contain any mandatory takeover, squeeze-out and sell-out provisions applicable to the Shares.

As the Shares of the Company are listed on Oslo Børs the Shares will be subject to the mandatory take-over provisions set out in the Norwegian Securities Trading Act chapter 6. Norwegian law requires any person, entity or group acting in concert that acquires shares representing more than 1/3 of the voting rights of a company primary listed on Oslo Børs or Oslo Axess to make an unconditional general offer for the purchase of the remaining shares in the company.

The offer is subject to approval by Oslo Børs before submission to the shareholders. The offer price per share must be at least as high as the highest price paid or agreed to be paid by the purchaser in the six-month period prior to the date the 1/3 threshold was exceeded, but equal to the market price if the market price was clearly higher when the 1/3 threshold was

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exceeded. In the event that the acquirer thereafter, but prior to the expiration of the bid period acquires, or agrees to acquire, additional shares at a higher price, the acquirer is obliged to restate its bid at that higher price.

In the mandatory offer, all shares must be treated equally. The mandatory offer must be made in cash or contain a cash alternative at least equal in value to any non-cash offer. A shareholder who fails to make the required offer must within four weeks dispose of sufficient shares so that the obligation ceases to apply. Otherwise, Oslo Børs may cause the shares exceeding the 1/3 threshold to be sold. Until the mandatory bid is made or the shares exceeding the 1/3 threshold are sold, the shareholder may not vote for shares exceeding the 1/3 threshold, unless a majority of the remaining shareholders approve. The shareholder can, however, exercise the right to dividends and pre-emption rights in the event of a share capital increase. Oslo Børs may impose a daily fine upon a shareholder who fails to make the required offer or sell down below 1/3.

The Company is subject to a repeated obligation to make a mandatory offer when passing 40% or 50% of the voting rights. However, for companies which were admitted to listing while the previous Securities Trading Act of 13 June 1997 No 79 was in force there is an exemption from this repeated mandatory offer obligation for any person, entity of group acting in concert who at the time of listing held more than 40% of the votes and after listing have uninterruptedly owned shares representing more than 40% of the votes. Any person, entity or group acting in concert who after 1 January 2008 pass a mandatory bid threshold in a way which do not trigger a mandatory bid obligation, is obligated, in general, to make a mandatory offer in case of each subsequent acquisition. The same obligation applies to any person, entity or group acting in concert who prior to 1 January 2008 passed the 40% mandatory offer threshold in a way which did not trigger a mandatory offer or at 1 January 2008 held shares representing between 1/3 and 40% of the votes in the company.

12.2.25 Redemption or conversion rights

Shareholders do not have any redemption rights or conversion rights with respect to their Shares.

The Company may acquire, for valuable consideration (determined by the directors), Shares in its own share capital if and in so far as approved by ordinary resolution of Shareholder, including acquisitions as a defence mechanism in a potential buy-out situation or a change of control situation in the Company. The authorization shall be given for a specific number of Shares and for a specific period of time.

The Company may, without being authorized thereto by the general meeting, acquire Shares in its own share capital (at prevailing market value and on such other terms as the directors shall determine) in order to transfer those Shares to the employees of the Company or a group company under a scheme applicable to such employees.

12.2.26 Rights of liquidation

Pursuant to the Companies Law, the Company may be voluntarily wound up by a Special Resolution, or by simple majority vote where the Company is unable to pay its debts as they fall due.

The Shares rank pari passu in the event of a return of capital by the Company upon a liquidation or otherwise.

If the Company shall be wound up, and the assets available for distribution amongst the Shareholders shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Shareholders in proportion to the net asset value per Share held by such Shareholders. If in a winding up the assets available for distribution amongst the Shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Shareholders in proportion to the par value per Share held

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by such Shareholders at the commencement of the winding up.

12.2.27 Shareholder matters

Disclosure requirements

Under the Norwegian Securities Trading Act, an acquisition that causes the acquirer's proportion of shares and/or rights to shares to reach or exceed 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90% of the share capital or an equivalent proportion of the voting rights in a company whose shares are quoted on Oslo Axess or Oslo Børs, the acquirer shall immediately notify such acquisition to the stock exchange. This applies correspondingly to anyone who through disposal changes his or her proportion of Shares so that the proportion is reduced to or below the set thresholds.

Reports to Shareholders

The Company publishes annual and interim reports that include financial statements. As at the year ended 31 December 2008, the consolidated financial statements are published in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board.

Notification and Publication Requirements

Since 2 September 2009, which was the date the Company applied for listing of its Shares on Oslo Axess, the Company has been providing and will continue to provide its shareholders, Oslo Stock Exchange and the market as a whole with timely and accurate information. Notices will be published through Oslo Børs' information system and on the Company's Internet site.

Shareholder Agreements

The Company is not aware of any outstanding shareholder agreements regulating the trading in the Shares.

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13. SECURITIES TRADING IN NORWAY

13.1 Introduction

Oslo Børs was established in 1819 and is the principal market in which shares, bonds and other financial instruments are traded in Norway. Oslo Børs is operated by Oslo Børs ASA, which also operates the regulated marketplace Oslo Axess.

Oslo Børs has entered into a strategic cooperation with the London Stock Exchange group with regards to, inter alia, trading systems for equities, fixed income and derivatives.

13.2 Trading and settlement

Trading of equities on Oslo Børs is carried out in the electronic trading system Millenium Exchange. This trading system was developed by the London Stock Exchange and is in use by all markets operated by the London Stock Exchange as well as by the Borsa Italiana and the Johannesburg Stock Exchange.

Official trading on Oslo Børs takes place between 09:00 hours (CET) and 16:20 hours (CET) each trading day, with a pre-trade period between 08:15 hours (CET) and 09:00 hours (CET), closing auction from 16:20 hours (CET) to 16:25 hours (CET) and a post-trade period from 16:25 hours (CET) to 17:30 hours (CET). Reporting of after exchange trades can be done until 17:30 hours (CET).

The settlement period for trading on Oslo Børs is two trading days (T+2). This means that securities will be settled on the investor's account in the VPS two days after the transaction, and that the seller will receive payment after two days.

Oslo Clearing ASA, a wholly-owned subsidiary of SIX x-clear Ltd, a company in the Six Group, has a license from the Norwegian FSA to act as a central clearing service, and has from 18 June 2010 offered clearing and counterparty services for equity trading on Oslo Børs.

Investment services in Norway may only be provided by Norwegian investment firms holding a license under the Norwegian Securities Trading Act, branches of investment firms from an EEA member state or investment firms from outside the European Economic Area ("EEA") that have been licensed to operate in Norway. Investment firms in an EEA member state may also provide cross-border investment services into Norway.

It is possible for investment firms to undertake market-making activities in shares listed in Norway if they have a license to this effect under the Norwegian Securities Trading Act, or in the case of investment firms in an EEA member state, a license to carry out market-making activities in their home jurisdiction. Such market-making activities will be governed by the regulations of the Norwegian Securities Trading Act relating to brokers' trading for their own account. However, market-making activities do not as such require notification to the Norwegian FSA or Oslo Børs except for the general obligation of investment firms being members of Oslo Børs to report all trades in stock exchange listed securities.

13.3 Information, control and surveillance

Under Norwegian law, Oslo Børs is required to perform a number of surveillance and control functions. The Surveillance and Corporate Control unit of Oslo Børs monitors market activity on a continuous basis. Market surveillance systems are largely automated, promptly warning department personnel of abnormal market developments.

The Norwegian FSA controls the issuance of securities in both the equity and bond markets in Norway and evaluates whether the issuance documentation contains the required information and whether it would otherwise be unlawful to carry out the issuance. Under Norwegian law, a company that is listed on a Norwegian regulated market, or has applied for listing on such market, must promptly release any inside information directly concerning the company (i.e. precise information about financial instruments, the issuer thereof or other matters which are

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likely to have a significant effect on the price of the relevant financial instruments or related financial instruments, and which are not publicly available or commonly known in the market). A company may, however, delay the release of such information in order not to prejudice its legitimate interests, provided that it is able to ensure the confidentiality of the information and that the delayed release would not be likely to mislead the public. Oslo Børs may levy fines on companies violating these requirements.

13.4 The VPS and transfer of shares

The Company's shareholder register is operated through the VPS. The VPS is the Norwegian paperless centralised securities register. It is a computerised bookkeeping system in which the ownership of, and all transactions relating to, Norwegian listed shares must be recorded. All transactions relating to securities registered with the VPS are made through computerised book entries. No physical share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the registered shareholder irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder must establish a share account with a Norwegian account agent. Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA are allowed to act as account agents.

The entry of a transaction in the VPS is generally prima facie evidence in determining the legal rights of parties as against the issuing company or any third party claiming an interest in the given security.

The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in respect of registered securities unless the error is caused by matters outside the VPS' control which the VPS could not reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may, however, be reduced in the event of contributory negligence by the aggrieved party.

The VPS must provide information to the Norwegian FSA on an on-going basis, as well as any information that the Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS regarding any individual's holdings of securities, including information about dividends and interest payments.

13.5 Shareholder register – Norwegian law

Under Norwegian law, shares are registered in the name of the beneficial owner of the shares. As a general rule, there are no arrangements for nominee registration, and Norwegian shareholders are not allowed to register their shares in the VPS through a nominee. However, foreign shareholders may register their shares in the VPS in the name of a nominee (bank or other nominee) approved by the Norwegian FSA. An approved and registered nominee has a duty to provide information on demand about beneficial shareholders to the issuer and to the Norwegian authorities. In case of registration by nominees, the registration in the VPS must show that the registered owner is a nominee. A registered nominee has the right to receive dividends and other distributions but cannot vote shares at general meetings on behalf of the beneficial owners.

13.6 Foreign investment in Norwegian shares

Foreign investors may trade shares listed on Oslo Børs through any broker that is a member of Oslo Børs, whether Norwegian or foreign.

13.7 Disclosure obligations

If a person's, entity's or consolidated group's proportion of the total issued shares and/or rights to shares in an issuer with its shares listed on a regulated market in Norway (with Norway as its home state, which will be the case for the Company) reaches, exceeds or falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90% of the share capital or the voting rights of that issuer, the person, entity or group in question has an

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obligation under the Norwegian Securities Trading Act to notify Oslo Børs and the issuer immediately. The same applies if the disclosure thresholds are passed due to other circumstances, such as a change in the Company's share capital.

13.8 Insider trading

According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments that are listed, or subject to the application for listing, on a Norwegian regulated market, or incitement to such dispositions, must not be undertaken by anyone who has inside information, as defined in section 3-2 of the Norwegian Securities Trading Act. The same applies to the entry into, purchase, sale or exchange of options or futures/forward contracts or equivalent rights whose value is connected to such financial instruments or incitement to such dispositions.

13.9 Mandatory offer requirements

The Norwegian Securities Trading Act requires any person, entity or consolidated group that becomes the owner of shares representing more than one-third of the voting rights of a Norwegian issuer with its shares listed on a Norwegian regulated market to, within four weeks, make an unconditional general offer for the purchase of the remaining shares in that issuer. A mandatory offer obligation may also be triggered where a party acquires the right to become the owner of shares that, together with the party's own shareholding, represent more than one-third of the voting rights in the issuer and Oslo Børs decides that this is regarded as an effective acquisition of the shares in question.

The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered.

When a mandatory offer obligation is triggered, the person subject to the obligation is required to immediately notify Oslo Børs and the issuer in question accordingly. The notification is required to state whether an offer will be made to acquire the remaining shares in the issuer or whether a sale will take place. As a rule, a notification to the effect that an offer will be made cannot be retracted. The offer is subject to approval by Oslo Børs before the offer is submitted to the shareholders or made public.

The offer price per share must be at least as high as the highest price paid or agreed to be paid by the offeror for the shares in the six-month period prior to the date the threshold was exceeded. If the acquirer acquires or agrees to acquire additional shares at a higher price prior to the expiration of the mandatory offer period, the acquirer is required to restate its offer at such higher price. A mandatory offer must be in cash or contain a cash alternative at least equivalent to any other consideration offered.

In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the relevant mandatory offer threshold within four weeks, Oslo Børs may force the acquirer to sell the shares exceeding the threshold by public auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer obligation remains in unfulfilled, exercise rights in the issuer, such as voting on shares at general meetings of the issuer's shareholders, without the consent of a majority of the remaining shareholders. The shareholder may, however, exercise its rights to dividends and pre-emption rights in the event of a share capital increase. If the shareholder neglects his duty to make a mandatory offer, Oslo Børs may impose a cumulative daily fine that accrues until the circumstance has been rectified.

Any person, entity or consolidated group that owns shares representing more than one-third of the votes in a Norwegian issuer with its shares listed on a Norwegian regulated market is required to make an offer to purchase the remaining shares of the issuer (repeated offer obligation) if the person, entity or consolidated group through acquisition becomes the owner of shares representing 40% or more of the votes in the issuer. The same applies correspondingly if the person, entity or consolidated group through acquisition becomes the

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owner of shares representing 50% or more of the votes in the issuer. The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares which exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered.

Any person, entity or consolidated group that has passed any of the above mentioned thresholds in such a way as not to trigger the mandatory bid obligation, and has therefore not previously made an offer for the remaining shares in the company in accordance with the mandatory offer rules is, as a main rule, required to make a mandatory offer in the event of a subsequent acquisition of shares in the company.

Should any minority shareholder not accept the offered price, such minority shareholder may, within a specified deadline of not less than two months, request that the price be set by a Norwegian court. The cost of such court procedure will, as a general rule, be the responsibility of the majority shareholder, and the relevant court will have full discretion in determining the consideration to be paid to the minority shareholder as a result of the compulsory acquisition.

Absent a request for a Norwegian court to set the price, or any other objection to the price being offered in a compulsory acquisition, the minority shareholders would be deemed to have accepted the offered price after the expiry of the specified deadline for raising objections to the price offered in the compulsory acquisition.

13.10 Foreign exchange controls

There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment of dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of shareholders of a Norwegian issuer who are not residents in Norway to dispose of their shares and receive the proceeds from a disposal outside Norway. There is no maximum transferable amount either to or from Norway, although transferring banks are required to submit reports on foreign currency exchange transactions into and out of Norway into a central data register maintained by the Norwegian customs and excise authorities. The Norwegian police, tax authorities, customs and excise authorities, the National Insurance Administration and the Norwegian FSA have electronic access to the data in this register.

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14. TAXATION

14.1 Introduction

This subsection presents a brief outline of certain tax aspects related to purchase, holding and disposal of shares in the Company. The presentation is based on Norwegian tax regulations in force as of the date of this Prospectus and describes the tax situation for Norwegian shareholders (shareholders with Norwegian tax domicile).

The presentation does not include any information with respect to taxation in any other jurisdiction than Norway, and the presentation only focuses on the shareholder categories explicitly mentioned below. Hence the presentation does i.a. not exhaustively cover the tax situation for non-Norwegian shareholders holding shares in the Company through a Norwegian permanent establishment. Further, special rules (exit taxation), which are not mentioned below, may apply to shareholders that have moved or will move out of Norway.

The presentation is of a general nature and is not intended to be an exhaustive analysis of all possible tax aspects relating to the shares in the Company or dividends paid from the Company. Accordingly, prospective holders of shares in the Company should consult their tax advisors as to the consequences under the tax regulations of Norway and elsewhere.

The presentation is subject to any amendments to tax laws and regulations that may occur after the date of this Prospectus, including any retroactive enforcement.

The subsection is based upon the Company being, for Norwegian tax purposes, tax domiciled in a low tax jurisdiction, as the Cayman Islands is currently on the "black list" from the Norwegian Tax Directorate.

14.1.1 Norwegian Tax Dividends

Personal shareholders

Dividends distributed from the Company to Norwegian shareholders who are natural persons are taxable as ordinary income (at a rate of 25 per cent), then calculated with a factor of 1.24, resulting in an effective tax rate of 29.76 per cent.

However, this will only apply for dividends exceeding a calculated risk-free return on the investment (tax-free return), which thus is tax exempt.

The tax-free return is calculated annually on a share-by-share basis and pertains to the owner of the share at the end of the year. The tax-free return is calculated on the basis of the shareholders cost price of the share multiplied by a statutory risk-free interest. The risk-free interest is determined on the basis of interest on 3-months Treasury bills, as published by Norges Bank (Central Bank of Norway), after tax. The risk free-interest rate is announced in January the year after the relevant fiscal year. The risk-free interest rate for 2016, announced in January 2017, was 0.4 per cent. The tax-free allowance will be calculated on each individual share, not on a portfolio basis.

If the actual distributed dividends for one year are less than the calculated tax-free return (calculated for each share), the surplus tax-free return can be carried forward to be offset against dividends or capital gains on the same share for subsequent years. Any such surplus tax-free return will be added to the basis for calculating the annually tax-free return for subsequent years.

Corporate Shareholders

Provided that the Company, according to Norwegian Tax Law, is tax domiciled in a low tax jurisdiction, the Norwegian exemption method will not apply. This entails that any dividends distributed from the Company to Norwegian Corporate Shareholders (limited liability companies and similar entities) will be regarded as taxable income subject to 25 percent corporate income tax. No tax free return applies.

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Furthermore, if certain requirements are met, and on certain conditions, a Norwegian corporate shareholder holding at least 10 percent of the capital and the voting rights in the Company, may be entitled to a tax credit in Norwegian tax for a proportionate part of the corporate tax paid by the Company in the jurisdiction where it is resident for tax purposes (to the extent any such taxes are levied). The total tax credit available is limited to the Norwegian tax on the dividends received.

In a tax settlement between the Norwegian government and the opposition parties 4 May 2016 it was agreed that the corporate income tax rate should be reduced to 23 per cent by 2018.

14.1.2 Norwegian Tax on Capital Gains on Shares

Personal Shareholders

Sale, redemption, or other disposal of shares is considered a realization for Norwegian tax purposes.

A capital gain or loss generated by a Norwegian shareholder who is a natural person through a realization of shares in the Company is taxable or tax deductible in Norway. Such capital gain or loss is included in or deducted from the basis for computation of ordinary income in the year of disposal at a rate of 25 per cent, then calculated with a factor of 1.24, resulting in an effective tax rate of 29.76 per cent. Gain is subject to tax and loss is deductible for tax purposes irrespective of the duration of the ownership and the number of shares owned and/or disposed of.

The capital gain or loss is calculated based on the consideration received for the share less the cost price of the share, transaction expenses and any surplus tax-free return on the share at the time of disposal (as a result of the non-utilization of the calculated annual tax-free returns). However, any surplus tax-free return may only be deducted in order to reduce a capital gain, and not to produce or increase a loss. Further, any surplus tax-free return on one share cannot be set-off against gains on another share. Expenses and broker's commission at both the purchase and the sale are deductible when calculating the capital gain or loss. A FIFO (First In First Out) principle applies if shares are not acquired at the same time. Please note that special rules may apply for shareholders that have emigrated or will emigrate.

Corporate Shareholders

Provided that the Company, according to Norwegian Tax Law, is tax domiciled in a low tax jurisdiction, the Norwegian exemption method will not apply. This entails that a capital gain or loss generated by a Norwegian corporate shareholder through a realization of shares in the Company is taxable or tax deductible in Norway at a rate of 25 per cent. Gain is subject to tax and loss is deductible for tax purposes irrespective of the duration of the ownership and the number of shares owned and/or disposed of.

The capital gain or loss is calculated based on the consideration received for the share less the cost price of the share and transaction expenses. Expenses and broker's commission at both the purchase and the sale are deductible when calculating the capital gain or loss. A FIFO (First In First Out) principle applies if shares are not acquired at the same time.

14.1.3 Norwegian Net Wealth Tax

Norwegian corporations are exempt from net wealth taxation.

Norwegian individual shareholders are subject to net wealth tax. The marginal net wealth tax rate is currently 0.85 percent. When calculating the net wealth tax base, shares in listed companies (including on Oslo Stock Exchange) are valued at the shares' quoted value as on January 1 in the assessment year.

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14.1.4 Norwegian Duties on Transfer of Shares

No stamp duty or similar duties are currently imposed in Norway on the transfer of shares, neither on acquisition nor disposal.

14.1.5 Foreign Shareholders

As a general rule, dividends received and capital gains generated by a foreign shareholder from shares in companies tax domiciled outside of Norway are not subject to Norwegian taxation unless (i) the shares are effectively connected to a business subject to taxation in Norway, or (ii) the foreign shareholder is a natural person who has been tax domiciled in Norway at any time during the five calendar years preceding the year of dividend distribution or realization.

14.1.6 Norwegian CFC-legislation/NOKUS legislation

Provided that the Company, according to Norwegian Tax Law, is tax domiciled in a low tax jurisdiction, and the Shares directly or indirectly are owned or controlled with 50 per cent or more by Norwegian shareholders, Norwegian CFC-legislation ("NOKUS") will apply. If NOKUS taxation applies, Norwegian shareholders are subject to annual taxation in Norway for their proportionate part of the taxable net income of the Company, regardless of whether dividends are distributed, and calculated in accordance with Norwegian tax law.

Pursuant to the Company's Articles of Association, the Company may refuse to accept shareholder positions leading to the NOKUS taxation becoming applicable. Also, other amendments to applicable tax provisions may have a negative impact on the return on the investment of Norwegian taxpayers.

14.1.7 Cayman Islands Taxation

There is, at present, no direct taxation or withholding in the Cayman Islands and interest, dividends and gains payable by the Company will be received free of all Cayman Islands taxes. The Company is registered as an "exempted company" pursuant to the Companies Law. The Company has received an undertaking from the Governor in Cabinet of the Cayman Islands to the effect that, for a period of twenty years from such date, no law that thereafter is enacted in the Cayman Islands imposing any tax or duty to be levied on profits, income or on gains or appreciation, or any tax in the nature of estate duty or inheritance tax, will apply to any property comprised in or any income arising from the Company, or to the Shareholders thereof, in respect of any such property or income.

14.2 Responsibility for withholding taxes at source

The Company will withhold taxes at source where relevant.

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15. ADDITIONAL INFORMATION

15.1 Documents on display

For the life of this Prospectus, the following documents (or copies thereof):

the Articles of Association of the Company

all reports, letters, historical financial information (Annual and Interim Financial Statements) and other documents which is included or referred to in this Prospectus; and

the historical financial information of the Company and its subsidiary undertakings for each of the three financial years preceding the publication of this Prospectus

are referred to and available for inspection at:

Polarcus' homepage www.polarcus.com;

the Company's present management location during normal business hours at Almas Tower, Level 32, Jumeirah Lakes Towers, PO Box 283373, Dubai, U.A.E, telephone number: +971 4 43 60 800, fax number: +971 4 43 60 808; and

at the Manager's offices during normal business hours at Munkedamsveien 45 E, 7th floor, 0250 Oslo, Norway, telephone number: +47 22 01 60 00.

15.2 Incorporation by reference

The information incorporated by reference in this Prospectus should be read in connection with the cross reference list as set out in the table below. Except as provided in this section, no other information is incorporated by reference into this Prospectus.

The Company incorporates its interim financial report for the fourth quarter 2016 and 2015 and the consolidated annual reports for the financial years ended 31 December 2015, 2014 and 2013.

Section in the Prospectus

Disclosure requirements of the Prospectus

Reference document and link

Section 10.2.2

Information about the Company's corporate governance and remuneration committee and nomination committee

Terms of Reference – Corporate Governance and remuneration committee and Nomination Committee: http://www.polarcus.com/media/1275/attachment-16_tor-cgr-committee.pdf http://www.polarcus.com/media/1273/attachment-17_tor-nomination-committee.pdf

Section 10.7

Information about the Company's compliance with the corporate governance regime

2015 Corporate Governance Report http://www.polarcus.com/media/1776/polarcus-2015-corporate-governance-report.pdf

Section 9.2

Historical financial information

Fourth Quarter 2016: http://www.newsweb.no/newsweb/attachment.do?name=Polarcus+Fourth+Quarter+2016+Report.pdf&attId=158528 Fourth Quarter 2015: http://hugin.info/151377/R/1990028/731030.pdf Annual Report 2015: http://hugin.info/151377/R/2003456/739508.pdf Annual Report 2014:


http://www.polarcus.com/media/1275/attachment-16_tor-cgr-committee.pdf

http://www.polarcus.com/media/1273/attachment-17_tor-nomination-committee.pdf

http://www.polarcus.com/media/1273/attachment-17_tor-nomination-committee.pdf







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https://polarcus.com/media/1498/annual-report-2014-final-v2.pdf Annual Report 2013: http://hugin.info/151377/R/1775449/605465.pdf

Section 9.9

Information concerning the Company's capital resources, Financial Risk Management

Annual Report 2015: http://hugin.info/151377/R/2003456/739508.pdf

Section 9.1

Accounting policies Annual Report 2015: http://hugin.info/151377/R/2003456/739508.pdf Annual Report 2014: https://polarcus.com/media/1498/annual-report-2014-final-v2.pdf Annual Report 2013: http://hugin.info/151377/R/1775449/605465.pdf

Section 12.2.13

Memorandum and Articles of association

Articles of Association: http://www.polarcus.com/media/1695/articles-of-association-polarcus-limited-22-11-15.pdf







http://www.polarcus.com/media/1695/articles-of-association-polarcus-limited-22-11-15.pdf

http://www.polarcus.com/media/1695/articles-of-association-polarcus-limited-22-11-15.pdf

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16. SELLING AND TRANSFER RESTRICTIONS

16.1 General

As a consequence of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Shares offered hereby.

Other than in Norway, the Company is not taking any action to permit a public offering of the Shares in any jurisdiction. Receipt of this Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this Prospectus is for information only and should not be copied or redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives a copy of this Prospectus in any jurisdiction other than Norway, the investor may not treat this Prospectus as constituting an invitation or offer to it, nor should the investor in any event deal in the Shares, unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to that investor, or the Shares could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements. Accordingly, if an investor receives a copy of this Prospectus, the investor should not distribute or send the same, or transfer Shares, to any person or in or into any jurisdiction where to do so would or might contravene local securities laws or regulations.Selling restrictions

16.1.1 United States

The Shares have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold except: (i) within the United States to QIBs (qualified institutional buyers) in reliance on Rule 144A; or (ii) to certain persons in offshore transactions in compliance with Regulation S under the U.S. Securities Act, and in accordance with any applicable securities laws of any state or territory of the United States or any other jurisdiction. Accordingly, each Manager has represented and agreed that it has not offered or sold, and will not offer or sell, any of the Shares as part of its allocation at any time other than to QIBs in the United States in accordance with Rule 144A or outside of the United States in compliance with Rule 903 of Regulation S. Transfer of the Shares will be restricted and each purchaser of the Shares in the United States will be required to make certain acknowledgements, representations and agreements, as described under Section 16.2.1 "—Transfer restrictions—United States".

Any offer or sale in the United States will be made by affiliates of the Manager who are broker-dealers registered under the U.S. Exchange Act. In addition, until 40 days after the commencement of a public offer, an offer or sale of Shares within the United States by a dealer, whether or not participating in such offering, may violate the registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A of the U.S. Securities Act and in connection with any applicable state securities laws.

16.1.2 United Kingdom

This Prospectus and any other material in relation to the Private Placement described herein is only being distributed to, and is only directed at persons in the United Kingdom who are qualified investors within the meaning of Article 2(1)I of the Prospectus Directive ("Qualified Investors") that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) high net worth entities or other persons falling within Article 49(2)(a) to (d) of the Order; or (iii) persons to whom distributions may otherwise lawfully be made (all such persons together being referred to as "Relevant Persons"). The Shares are only available to, and any investment or investment activity to which this Prospectus relates is available only to, and will be engaged in only with, Relevant Persons). This Prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom. Persons who are not Relevant Persons

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should not take any action on the basis of this Prospectus and should not rely on it.

16.1.3 European Economic Area

In relation to each Relevant Member State, an offer to the public of any Shares which are the subject of the offering contemplated by this Prospectus may not be made in that Relevant Member State, other than the offering in Norway as described in this Prospectus, once the Prospectus has been approved by the competent authority in Norway and published in accordance with the Prospectus Directive (as implemented in Norway), except that an offer to the public in that Relevant Member State of any Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

a) to legal entities which are Qualified Investors as defined in the Prospectus Directive;

b) to fewer than 150 natural or legal persons (other than Qualified Investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Manager for any such offer, or in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of Shares shall require the Company or any Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer to the public" in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Securities to be offered so as to enable an investor to decide to purchase any Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State.

This EEA selling restriction is in addition to any other selling restrictions set out in this Prospectus.

16.1.4 Additional jurisdictions

Canada

This Prospectus is not, and under no circumstance is to be construed as, a prospectus, an advertisement or a public offering of the Shares in Canada or any province or territory thereof. Any offer or sale of the Shares in Canada will be made only pursuant to an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable provincial securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made.

Hong Kong

The Shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, and no advertisement, invitation or document relating to the Shares may be issued or may be in the possession of any person for the purposes of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong)

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other than with respect to Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.

Singapore

This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Shares may not be circulated or distributed, nor may they be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person, or any person pursuant to section 275(1A), and in accordance with the conditions, specified in section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

16.1.5 Other jurisdictions

The Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into, Japan, Australia or any other jurisdiction in which it would not be permissible to offer the Shares.

In jurisdictions outside the United States and the EEA where the Private Placement would be permissible, the Shares will only be offered pursuant to applicable exceptions from prospectus requirements in such jurisdictions.

16.2 Transfer restrictions

16.2.1 United States

The Shares have not been and will not be registered under the U.S. Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Terms defined in Rule 144A or Regulation S shall have the same meaning when used in this section.

Each purchaser of the Shares outside the United States pursuant to Regulation S will be deemed to have acknowledged, represented and agreed that it has received a copy of this Prospectus and such other information as it deems necessary to make an informed decision and that:

The purchaser is authorised to consummate the purchase of the Shares in compliance with all applicable laws and regulations.

The purchaser acknowledges that the Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority or any state of the United States, and are subject to significant restrictions on transfer.

The purchaser is, and the person, if any, for whose account or benefit the purchaser is acquiring the Shares was located outside the United States at the time the buy order for the Shares was originated and continues to be located outside the United States and has not purchased the Shares for the benefit of any person in the United States or entered into any arrangement for the transfer of the Shares to any person in the United States.

The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is not in the business of buying and selling securities or, if it is in such business, it did not acquire the Shares from the Company or an affiliate thereof in the initial distribution of such Shares.

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The purchaser is aware of the restrictions on the offer and sale of the Shares pursuant to Regulation S described in this Prospectus.

The Shares have not been offered to it by means of any "directed selling efforts" as defined in Regulation S.

The Company shall not recognise any offer, sale, pledge or other transfer of the Shares made other than in compliance with the above restrictions.

The purchaser acknowledges that the Company, the Manager and its respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

Each purchaser of the Shares within the United States pursuant to Rule 144A will be deemed to have acknowledged, represented and agreed that it has received a copy of this Prospectus and such other information as it deems necessary to make an informed investment decision and that:

The purchaser is authorised to consummate the purchase of the Shares in compliance with all applicable laws and regulations.

The purchaser acknowledges that the Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United States and are subject to significant restrictions to transfer.

The purchaser (i) is a QIB (as defined in Rule 144A), (ii) is aware that the sale to it is being made in reliance on Rule 144A and (iii) is acquiring such Shares for its own account or for the account of a QIB, in each case for investment and not with a view to any resale or distribution to the Shares.

The purchaser is aware that the Shares are being offered in the United States in a transaction not involving any public offering in the United States within the meaning of the U.S. Securities Act.

If, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Shares, as the case may be, such Shares may be offered, sold, pledged or otherwise transferred only (i) to a person whom the beneficial owner and/or any person acting on its behalf reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, (ii) in accordance with Regulation S, (iii) in accordance with Rule 144 (if available), (iv) pursuant to any other exemption from the registration requirements of the U.S. Securities Act, subject to the receipt by the Company of an opinion of counsel or such other evidence that the Company may reasonably require that such sale or transfer is in compliance with the U.S. Securities Act or (v) pursuant to an effective registration statement under the U.S. Securities Act, in each case in accordance with any applicable securities laws of any state or territory of the United States or any other jurisdiction.

The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is not in the business of buying and selling securities or, if it is in such business, it did not acquire the Shares from the Company or an affiliate thereof in the initial distribution of such Shares.

The Shares are "restricted securities" within the meaning of Rule 144(a) (3) and no representation is made as to the availability of the exemption provided by Rule 144 for resales of any Shares, as the case may be.

The Company shall not recognise any offer, sale pledge or other transfer of the Shares made other than in compliance with the above-stated restrictions.

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The purchaser acknowledges that the Company, the Manager and its respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

16.2.2 European Economic Area

Each person in a Relevant Member State (other than, in the case of paragraph (a), persons receiving offers contemplated in this Prospectus in Norway) who receives any communication in respect of, or who acquires any Shares under, the offers contemplated in this Prospectus will be deemed to have represented, warranted and agreed to and with each Manager and the Company that:

it is a qualified investor as defined in the Prospectus Directive; and

in the case of any Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Shares acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of the Manager has been given to the offer or resale; or (ii) where Shares have been acquired by it on behalf of persons in any Relevant Member State other than Qualified Investors, the offer of those Shares to it is not treated under the Prospectus Directive as having been made to such persons.

For the purposes of this representation, the expression an "offer" in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

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17. DEFINITIONS AND GLOSSARY

The following definitions and glossary apply in this Prospectus unless otherwise dictated by the context, including the foregoing pages of this Prospectus.

2010 PD Amending Directive

Directive 2010/73/EU amending the Prospectus Directive

2010 Plan The Company's employee share option plan as approved by the AGM in 2010, under which a maximum of 750,000 Shares could be granted

2012 Plan The Company's employee share option plan as approved by the AGM in 2012, under which a maximum of 1,400,000 Shares could be granted



2016 Restructuring The Company's refinancing of the majority of its debt in Q1 2016

2017 Amendments The amendments of the Fleet Bank Facility and the Unsecured Bonds agreed in Q1 2017

A Bonds See definition of "CB Tranche A" below

Articles of Association The memorandum and articles of association of the Company, as amended and restated from time to time

AGM Annual general meetings of the Company

AML Legislation Norwegian Act on Money Laundering No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009, collectively

Annual Financial Statements

The Company's audited consolidated financial statements for 2013, 2014 and 2015

APAC The Asia Pacific region

APM Alternative performance measures; non-IFRS financial measures

Bareboat Charter Agreements

The bareboat charterparty agreements, both dated 30 June 2008 (as later amended) between the Owner and the Charterers in respect of the Vessels

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BBCP Bareboat Charter Party agreement with SCF Sakhalin Supply Limited regarding the vessel VYACHESLAV TIKHONOV

BIMCO The Baltic and International Maritime Council – shipping association representing ship-owners controlling around 65% of the world's tonnage

Board Members The members of the Board of Directors

Board or Board of Directors

The board of directors of the Company

CAPEX Capital expenditure

CB Tranche A A tranche under the USD 125,000,000 2.875% Secured Convertible Bond issue 2011/2016 with ISIN NO 001 0607435.

CB Tranche B1 A tranche under the USD 125,000,000 2.875% Secured Convertible Bond issue 2011/2016 with ISIN NO 001 0757263

CB Tranche B2 A tranche under the USD 125,000,000 2.875% Secured Convertible Bond issue 2011/2016 with ISIN NO 011 0757271.

CEO The Company's chief executive officer

CET Central European time

CFC-legislation Controlled foreign corporation legislation

Charter The potential agreement with Socvomflot to charter a vessel on bareboat terms with delivery scheduled for March 2017 for a fixed period of 5 ½ years

Charterers Polarcus Naila AS and Polarcus Nadia AS

Class B Shares The Company's 463,491,579 authorised unissued Class B shares

Companies Law The Companies Law (2013 revision) of the Cayman Islands (as amended)

Company or Polarcus Polarcus Limited, a Cayman Island tax exempted company incorporated in the Cayman Islands

Cost Management Program

A cost management program with the aim of reducing the 2015 cost base by USD 40 million

DNV Det Norske Veritas – a classification society

DSR Debt Service Ratio

DUG DownUnder GeoSolutions Pty Ltd

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DUG Broad DUG's broadband technology

DWD or Drydocks Dubai Drydocks World Dubai LLC, UEA, an entity of the Government of Dubai established in 1983

E&P Exploration and production (of oil and gas)

EAME Europe, Africa and Middle East region

EBIT Earnings before interest and tax

EBITDA Earnings before interest, tax, depreciation, amortization and impairments

East Guardian East Guardian Asset Management AG

EEA The European Economic Area

EHSQ Environment, Health, Safety, Quality

Eligible Shareholders Shareholders of the Company as of 9 February 2017, as registered in VPS on the Record Date, who did not participate in the Private Placement and who are not resident in a jurisdiction where such offering would be unlawful or, for jurisdictions other than Norway, would require any prospectus, filing, registration or similar action.

ESSA Environmentally Sensitive Sea Areas

EU The European Union

EUR EURO, the currency introduced at the start of the third stage of the Economic and Monetary Union to the Treaty establishing the European Economic Community, as amended by the Treaty on the European Union

Fleet Bank Facility The term loan facility of USD 410 million entered into with, among others, Eksportfinans ASA and Eksportkreditt Norge AS as lenders andDNB Bank ASA, DVB Bank SE, Nordic Branch and GIEK as guarantors

Forward-looking statements

All statements other than statements as to historic

facts or present facts and circumstances, typically indicated by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions

GBP The currency of the United Kingdom (British Pound)

General Meeting The Company's general meeting of shareholders

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GIEK Garanti-instituttet for Eksportkreditt – guarantor for Norwegian companies' export credits on behalf of the Norwegian Government

Group or Polarcus Group Polarcus and its consolidated subsidiaries

HC Hydrocarbons

HD3D High Density 3-dimensional

HFO Heavy fuel oil – pure or nearly pure residual oil

IAGC International Association of Geophysical Contractors

IASB International Accounting Standards Board

IFRS International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB)

Ineligible Shareholders Shareholders resident in jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company's assessment, prohibits or otherwise restricts subscription for Offer Shares, and shareholders who participated in the Private Placement

Inline fold The number of independent reflection points that occur at the same subsurface coordinates

Interim Financial Statements

The Company's unaudited condensed consolidated interim financial statements as of and for the three and twelve months ended December 31 2016

ISIN Securities number in the Norwegian Central Securities Depository (VPS)

LIBOR London Interbank Offered Rate

LMAA London Maritime Arbitrators Association

Management The management of Polarcus currently consisting of 4 executives

Manager ABG Sundal Collier ASA

Memorandum of Association

The Memorandum of Association of the Company

Merkur Markets A Norwegian regulated market, owned and operated by Oslo Børs ASA

MGO Marine gas oil – fuel oil made from distillate only

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MLA Master License Agreement

MOA A memorandum of agreement dated 11 February 2013 between Polarcus Samur AS and TPAO

Multi-azimuth or MAZ Method of improving seismic data acquisition data quality by acquiring the area in different directions to provide illumination of the target zone from a number of different perspectives

NASA North and South America region

NIBOR Norwegian Interbank Offered Rate

NOK Norwegian Kroner, the lawful currency of Norway. (Norwegian: "krone")

NOKUS Norwegian CFC-legislation

NOK Unsecured bond issue

The Company's bonds issued under ISIN NO 001 0714389 and NO 001 0757255

Non-Norwegian shareholders

Shareholders who are not resident in Norway for tax purposes

Norwegian FSA The Financial Supervisory Authority of Norway (Norwegian: "Finanstilsynet")

Norwegian corporate shareholders

Shareholders who are limited liability companies and certain similar corporate entities resident in Norway for tax purposes

Norwegian Securities Trading Act

The Norwegian Securities Trading Act of 29 June 2007 no. 75 (Norwegian: "Verdipapirhandelloven")

New Shares 1,000,000,000 new shares issued by the Company in the Private Placement

NUES Norwegian Corporate Governance Code

Offer Shares The up to 122,000,000 new shares with a par value of USD 0.01 each being offered in the Offering

Offering The repair offering by the Company of the Offer Shares at a subscription price of NOK 0.33 per Offer Share

OPEC Organisation for Petroleum Exporting Countries

Order Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

Ordinary Shares The Company's ordinary shares with a nominal value of USD 0.01

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Oslo Axess A Norwegian regulated market, owned and operated by Oslo Børs ASA (see www.osloaxess.no)

Oslo Børs Oslo Børs ASA or, as the context may require, Oslo Børs, a Norwegian regulated stock exchange, owned and operated by Oslo Børs ASA. (see www.oslobors.no)

Owner GSH2 Seismic Carrier I AS

PAM Passive Acoustic Monitoring

PCA Polycyclic Aromatics

Polarcus Do Brasil Ltda Polarcus Serviços Geofísicos Do Brasil Ltda

Ppm Parts per million

Prefunding Level The prefunding level is calculated by dividing the multi-client prefunding revenues by the cash investments in the multiclient library.

Private Placement The private placement as completed on 8 March 2017 through the issuance of 1,000,000,000 New Shares

Prospectus This prospectus

Prospectus Directive Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State

QC Quality Control

QIBs Qualified institutional buyers, as defined in Rule 144A

Qualified Investors Qualified investors within the meaning of Article 2(1)I of the Prospectus Directive

Record Date 13 February 2017

Registrar//VPS Registrar DnB Bank ASA, Verdipapirservice, Dronning Eufemias gate 30, 0191 Oslo

Relevant Member State Each Member State of the EEA which has implemented the Prospectus Directive

Relevant Persons Persons in the UK that are (i) investment professionals falling within Article 19(5) of the Order or (ii) high net worth entities, and other persons to whom the Prospectus may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order

http://www.osloaxess.no/

http://www.oslobors.no/

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Reset Event When 50% of the bonds are called/repaid across all unsecured tranches (CB Tranche B1, CB Tranche B2, the A Bonds and the B Bonds)

Rule 144A Rule 144A under the U.S. Securities Act

Sovcomflot SCF GEO AS

SCF OAO Sovcomflot

Schottel Schottel GmbH

SFA The Securities and Futures Act of Singapore

Share(s) The Company's shares

Shareholder(s) Person or legal entity registered in the VPS Register as holder of a Share

Special Resolution A resolution of the Company's shareholders which requires at least 75% of the votes cast by shareholders at a general meeting in favour of it in order to pass or with the unanimous written consent of shareholders

Subscription Period The subscription period for the Offering, commencing at 22 March 2017 and ending at 5 April 2017

Subscription Rights Non-transferable subscription rights granted to Eligible Shareholders in connection with the Offering

Systems Data processing hardware and software on board all Polarcus operated vessels

TGS TGS-NOPEC Geophysical Company

TPAO Turkish Petroleum Corporation

UK United Kingdom

Unsecured Bonds The bonds issued under the Unsecured Bond Loans

Unsecured Bond Loans The loans in respect of the NOK Unsecured bond issue and the USD Unsecured bond issue

USD United States Dollar, the lawful currency of the United States of America

USD Unsecured bond issue

The Company's bonds issued under ISIN NO 001 0680150 and NO 001 0757248

U.S. Exchange Act The United States Securities Exchange Act of 1934, as amended

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U.S. Securities Act The United States Securities Act of 1933, as amended

Vessels MV Polarcus Nadia and MV Polarcus Naila

VPS/VPS Register VPS Holding ASA, the Norwegian Central Securities Depository

VPS account An account held with the VPS Register to register ownership of securities

Waiver The reset of the Debt Service Ratio (DSR) to 0.75 from 1.25 under the Fleet Bank Facility

Wide-azimuth or WAZ Method of improving seismic data acquisition data quality by laterally offsetting the source from the line of traverse to improve target illumination at depth and beneath sub-surface structures

Appendix 1

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SUBCRIPTION FORM POLARCUS LIMITED REPAIR OFFERING

For information regarding the repair offering (the "Offering") with subscription rights ("Subscription Rights") for all shareholders of Polarcus Ltd. (the "Company") in VPS as of 9 February 2017 who did not participate in the Private Placement (the "Eligible Shareholders"), please see the prospectus dated 21 March 2017 (the "Prospectus"). Terms defined in the Prospectus shall have the same meaning when used herein. Subscription Forms may be mailed, e-mailed or delivered in the period from 22 March 2017 at 09:00, CET to 5 April 2017 at 12:00, CET, to: ABG Sundal Collier ASA, PO Box 1444 Vika, N-0115 Oslo, e-mail [email protected]. Accurately completed Subscription Forms must be received by the Manager by 16:30, CET, on 5 April 2016. It is not sufficient for the Subscription Form to be postmarked within the Subscription Period. Norwegian subscribers may also subscribe for Offer Shares on the following Internet page: www.abgsc.com within the Subscription Period. Neither the Company nor the Manager may be held responsible for delays in the mail system or for non-receipt of Subscription Forms forwarded by facsimile to the Manager. The Company and the Manager reserve the right to disregard improperly completed, delivered or executed Subscription Forms, or any subscription which may be unlawful. A subscription is irrevocable and may not be withdrawn, cancelled or modified once it has been received by the Manager. The minutes from the extraordinary general meeting of the Company held on 6 March 2017, the Company's articles of association and its annual reports for the last two years are available at the Company's web page www.polarcus.com. The resolution to increase the share capital by the EGM is included in the Prospectus. Eligible Shareholders will receive 0.33 Subscription Rights per for each existing share registered as held by such Eligible Shareholder as of the Record Date. The Subscription Rights will be registered on each Eligible Shareholder's VPS account. Each Subscription Right carries the right to subscribe for one (1) Offer Share. The number of Subscription Rights granted to each Eligible Shareholder will be rounded down to the nearest whole Subscription Right. The Subscription Price is NOK 0.33 per Offer Share. The Subscription Rights are non-transferable. The Subscription Rights are registered with the VPS under the International Securities Identification Number (ISIN) KYG7153K1655. Over-subscription and subscription without Subscription Rights is permitted; however there can be no assurance that Offer Shares will be allocated for such subscriptions. Subscription Rights not used to subscribe for Offer Shares before the end of the Subscription Period will have no value and will lapse without compensation to the holder. The principles of allocation of Offer Shares are described in the Prospectus. Notifications of allotments are expected to be mailed on or about 6 April 2017. By signing the Subscription Form, the subscriber grants the Manager an irrevocable one-time authorisation to debit the allotted subscription amount in NOK from the bank account designated by the subscriber. The amount will be debited on or about 7 April 2017, and there must be sufficient funds in the stated bank account from and including two banking days prior to the Payment Date. If there are insufficient funds in a subscriber's bank account or it is impossible to debit a bank account for the amount the subscriber is obligated to pay, or payment is not received by the Manager according to other instructions, the allotted Offer Shares will be withheld. Interest will, in such event, accrue at the applicable rate according to the Norwegian Act on Interest on Overdue Payments 1976, currently 8.50 percent per annum. The Manager reserves the right (but is under no obligation) to make up to three debits in the period up to seven days after the Payment Date, if there are insufficient funds on the account on the Payment Date. If payment is not made within the due date, the Manager reserves the right without further notice to take over the allocated Offer Shares and/or, at the cost of the applicant to sell the allocated Offer Shares on such terms and in such manner as it decides in accordance with applicable regulations. The original applicant remains liable for payment of the Subscription Price multiplied by the allocated Offer Shares, together with any interest, costs, charges and expenses accrued, and payment may be enforced for any such amount outstanding. Subscribers who do not have a Norwegian bank account must ensure that payment for the allocated Offer Shares is made on or before the Payment Date. Assuming that payment from all subscribers are made when due, delivery of the Offer Shares is expected to take place on or about 10 April 2017. A subscriber will not under any circumstances be entitled to sell or transfer its Offer Shares until these shares have been paid in full by such subscriber and registered on the subscribers' VPS accounts. Assuming timely payment by all subscribers, the Company expects that the Offer Shares will be listed on Oslo Børs on or about 10 April 2017.

SPECIFICATION OF THE SUBSCRIPTION

The Offering may, in certain jurisdictions, be restricted by law. For more information on applicable selling and transfer restrictions in respect of the Rights and the Offer Shares, see the Prospectus under the heading "Selling and Transfer Restrictions." Note: Subscribers may subscribe for more (or less) than the number of Subscription Rights.

Subscriber's VPS-account no.

No. of Subscription Rights Subscribes for (number of shares)

(For official use: Serial no.)

Subscription price per share NOK 0.33

Total amount to be paid NOK

One-time authorisation for debiting account (must be filled in): The undersigned hereby grants an irrevocable authorisation to the Manager to debit the Norwegian bank account set out herein for the allotted amount __________________________________________ (the value in NOK of: number of allotted shares * NOK 0.33) Bank account (11 digits)

_____________________________________________________________________________________________________________________________ Place and date of subscription. Binding signature. The subscriber must be of age. (Must be dated within the Subscription Period.) When signed on behalf of another person, evidence of authority must be provided. DETAILS RE SUBSCRIBER (REQUIRED INFORMATION)

Subscriber's VPS account no.

PLEASE NOTIFY THE REGISTRAR OF ANY CHANGES

Subscriber's first name

Subscriber's surname/firm etc.

Street address etc. (private subscribers; home address)

Postal code and area

Date of birth and national ID number

Dividends to be credited to bank account (11 digits)

Nationality

Telephone (at day time)/Telefax/e-mail

mailto:[email protected]



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ADDITIONAL GUIDELINES FOR SUBSCRIBERS Regulatory issues: In accordance with the Markets in Financial Instruments Directive ("MiFID") of the European Union, Norwegian law imposes requirements in relation to business investments. In this respect, the Manager must categorize all new clients in one of three categories: eligible counterparties, professional clients and non-professional clients. All subscribers in the Offering who are not existing clients of one of the Manager will be categorized as non-professional clients. Subscribers can, by written request to the Manager, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact ABG Sundal Collier, PO Box 1444 Vika, N-0115 Oslo, Norway, phone +47 22 01 61 73. The subscriber represents that he/she/it is capable of evaluating the merits and risks of a decision to invest in the Company by subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.

Selling Restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to Section 16 "Selling and Transfer Restrictions" of the Prospectus. The Company is not taking any action to permit a public offering of the Subscription Rights or the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any jurisdiction other than Norway. Receipt of the Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, the Prospectus is for information only and should not be copied or redistributed. Persons outside Norway should consult their professional advisors as to whether they require any governmental or other consent or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the responsibility of any person wishing to subscribe for Offer Shares under the Offering to satisfy himself as to the full observance of the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental or other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories. The Subscription Rights and Offer Shares have not been registered, and will not be registered, under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, exercised, pledged, resold, granted, delivered, allocated, taken up, transferred or delivered, directly or indirectly, within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Subscription Rights and Offer Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan, Hong Kong, Singapore or the United Kingdom and may not be offered, sold, exercised, pledged, resold, granted, allocated, taken up, transferred or delivered, directly or indirectly, in or into Australia, Canada, Japan, Hong Kong, Singapore or the United Kingdom or in any other jurisdiction in which it would not be permissible to offer the Subscription Rights or the Offer Shares unless otherwise described in Section 16 of the Prospectus. A notification of exercise of Subscription Rights and subscription of Offer Shares in contravention of the above restrictions may be deemed to be invalid. By subscribing for the Offer Shares, persons effecting subscriptions will be deemed to have represented to the Company that they, and the persons on whose behalf they are subscribing for the Offer Shares, have complied with the above selling restrictions. Persons effecting subscriptions on behalf of any person located in the United States will be responsible for confirming that such person, or anyone acting on its behalf, has executed the investor letter in the form to be provided by the Manager upon request.

Execution Only: The Manager will treat the Subscription Form as an execution-only instruction. The Manager is not required to determine whether an investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act.

Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and foreign legislation applicable to the Manager there is a duty of secrecy between the different units of each of the Manager. This may entail that other employees of the Manager may have information that may be relevant to the subscriber and to the assessment of the Offer Shares, but which the Manager will not have access to in their capacity as Manager for the Offering.

Information barriers: The Manager is a securities firm that offers a broad range of investment services. In order to ensure that assignments undertaken in the Manager's corporate finance departments are kept confidential, the Manager's other activities, including analysis and stock broking, are separated from the Manager's corporate finance departments by information walls. Consequently the subscriber acknowledges that the Manager's analysis and stock broking activity may conflict with the subscriber's interests with regard to transactions in the Shares, including the Offer Shares.

VPS account and mandatory anti-money laundering procedures: The Offering is subject to the Norwegian Money Laundering Act of 6 March 2009 No. 11 and the Norwegian Money Laundering Regulations of 13 March 2009 No. 302 (collectively, the "Anti-Money Laundering Legislation"). Subscribers who are not registered as existing customers of the Manager must verify their identity to the Manager in accordance with requirements of the Anti-Money Laundering legislation, unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are exempted, unless verification of identity is requested by the Manager. Subscribers who have not completed the required verification of identity prior to the expiry of the Subscription Period will not be allocated Offer Shares. Participation in the Offering is conditional upon the subscriber holding a VPS account. The VPS account number must be stated in the subscription form. VPS accounts can be established with authorised VPS registrars, who can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Establishment of a VPS account requires verification of identity to the VPS registrar in accordance with the Anti Money Laundering Legislation. However, non-Norwegian investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be authorised by the Financial Supervisory Authority of Norway.

Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service the banks in Norway provide in cooperation. In the relationship between the payer and the payer's bank the following standard terms and conditions apply:

a) The service "Payment by direct debiting – securities trading" is supplemented by the account agreement between the payer and the payer's bank, in particular Section C of the account agreement, General terms and conditions for deposit and payment instructions.

b) Costs related to the use of "Payment by direct debiting – securities trading" appear from the bank's prevailing price list, account information and/or information given in another appropriate manner. The bank will charge the indicated account for costs incurred.

c) The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank that in turn will charge the payer's bank account.

d) In case of withdrawal of the authorisation for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer's bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

e) The payer cannot authorise payment of a higher amount than the funds available on the payer's account at the time of payment. The payer's bank will normally perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the difference shall immediately be covered by the payer.

f) The payer's account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorisation for direct debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorisation has expired as indicated above. Payment will normally be credited the beneficiary's account between one and three working days after the indicated date of payment/delivery.

g) If the payer's account is wrongfully charged after direct debiting, the payer's right to repayment of the charged amount will be governed by the account agreement and the Norwegian Financial Contracts Act.

Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No. 100; 8.5% per annum as of the date of the Prospectus. If a subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the restrictions in the Public Limited Companies Act and at the discretion of the Underwriters, not be delivered to the subscriber. The Manager reserve the right to, at any time and at the risk and cost of the subscriber, re-allot, cancel or reduce the subscription and the allocation of the allocated Offer Shares, or, if payment has not been received by the Payment Date, without further notice sell, assume ownership to or otherwise dispose of the allocated Offer Shares in accordance with applicable law. If Offer Shares are sold on behalf of the subscriber, such sale will be for the subscriber's account and risk and the subscriber will be liable for any loss, costs, charges and expenses suffered or incurred by the Company and/or the Manager as a result of, or in connection with, such sales. The Company and/or the Manager may enforce payment for any amounts outstanding in accordance with applicable law.

Polarcus Limited Almas Tower, Level 32 Jumeirah Lakes Towers

PO Box 283373 Dubai U.A.E

ABG Sundal Collier ASA Munkedamsveien 45 E, 7th floor

P.O Box 1444 Vika N-0115 Oslo

Norway

Legal counsel to the Company Advokatfirmaet Wiersholm AS

Dokkveien 1 P.O. Box 1400 Vika

N-0115 Oslo Norway

PROSPECTUS...PROSPECTUS POLARCUS LIMITED (a public quoted company organized under the laws of Cayman...

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